Ireland’s choice: €4bn in cuts or IMF

Ireland’s choice: €4bn in cuts or IMF

By Paul O’Brien, Political Correspondent

Saturday, October 17, 2009

THE Government has raised the spectre of the International Monetary Fund (IMF) coming in to run the country if people don’t accept the savage €4 billion of cuts to be imposed in the December budget.
Taoiseach Brian Cowen and his Cabinet colleagues have launched a PR offensive to soften people up for the cutbacks, saying the black hole in the public finances was unsustainable.

Mr Cowen said everybody would have to make a contribution to help solve the crisis "according to their means".

Finance Minister Brian Lenihan said Ireland would face "ruin" if action wasn’t taken to get the national debt under control.

Green Party leader and Environment Minister John Gormley said there was no point misleading people about how difficult the budget would be.

And Health Minister Mary Harney warned that if the Government didn’t take the necessary tough decisions, the IMF would do so instead. "We’re currently spending €500m a week more than we’re raising. That’s not a sustainable situation," she said, referring to the need to get borrowing under control.

"If the Government hasn’t the capacity to do what’s needed, then others will come in, like the IMF, and overnight they will make decisions."

She warned the IMF’s solutions would be much more severe: "They will immediately start cutting expenditure by maybe 30% or 40% — that is a fact."

As part of the offensive, Mr Cowen echoed the comments of Mr Lenihan by saying the Cabinet would lead by example in taking further pay cuts.

"People can be assured that from myself down, there will be a good example given," Mr Cowen said.

The Taoiseach and his colleagues took a 10% pay cut in last October’s emergency budget.

But an analysis shows that they were cushioned against this cut by a series of massive pay increases over the preceding years.

The Taoiseach’s salary rose from €243,057 in July 2005 when Bertie Ahern was in power to €285,582 in September 2008, by which time Mr Cowen had succeeded him — an increase of €42,525.

The Tánaiste’s salary rose from €209,222 in 2005 to €245,324 in September 2008 — a rise of €36,102.

Ministers’ pay rose from €192,304 to €225,195 in the same period — an increase of €32,891.

Even after the 10% pay cut in the October Budget, the Taoiseach still earns €257,024, the Tánaiste €220,792 and ministers €202,676.

Fine Gael’s Leo Varadkar said further pay cuts of between 20% and 30% would be needed in the budget to bring ministerial pay in line with European norms.

But while he welcomed the Government’s intention to take cuts, he warned the coalition would have to be tough enough to continue the pay reductions "all the way down" the public service in order to bring state spending under control.
This story appeared in the printed version of the Irish Examiner Saturday, October 17, 2009

Comment:

It would appear that the old saying, “On any given day there is more money stolen with a pen than with a gun” could apply here. It is nothing short of criminal that the Irish people should be expected to accept the savage cuts in goods and services that we have read about recently while their government officials are living in the lap of luxury.