Irish Govt raises four-year austerity target to €15bn

[gaelic cowboy]

Govt raises four-year target to €15bn


The Government has said it will need to bring in measures totalling €15bn over the next four years to meet a 2014 target for cutting the Budget deficit agreed with the EU.

Spoiler Alert, click show to read: 

The Government has said it will need to bring in measures totalling €15bn over the next four years to meet a 2014 target for cutting the Budget deficit agreed with the European Union.
The figure of €15bn is double the one set out in last year's Budget.
The Government must bring the deficit down to 3% of economic output by 2014 to come back in line with EU rules.
In a statement, the Government said the main reasons for the significant increase were lower economic growth prospects at home and abroad and the higher cost of paying interest on our debt.
The Government said the scale of the measures needed for next year and a breakdown for the remaining three years would be announced in the proposed four-year plan, expected to be published next month.
The Government said it realised that the spending cuts and revenue raising measures needed would have an impact on people's living standards, but warned that it was 'neither credible nor realistic' to delay these measures.
'To do so would further undermine confidence in our ability to meet our obligations and responsibilities and delay a return to sustainable growth and full employment in our economy,' the Government said.
Finance Minister Brian Lenihan said a significant frontloading of the €15bn correction will be required in 2011, but precise figures will not be given until the middle of next month.
He acknowledged the Government is concerned about the impact of the multi-billion euro correction, but said it has to happen to put the public finances back on a sustainable footing.
Minister for Tourism and Sport Mary Hanafin has said no department would be ring-fenced from cuts in the upcoming Budget.
She acknowledged a cut in child benefit was possible.
However, she said it was difficult to tax and added: 'There was no way of identifying who the high-earning families who got child benefit were.'
The Government's statement came after the the Cabinet held a day-long session to discuss the Budget and the four-year economic plan.
Ministers met for over three hours at Farmleigh House in the Phoenix Park last night.
The meetings took ahead of this week's Dáil debate on the economy.
The Government has warned that in addition to increased taxes, there will be spending cuts in health, social welfare and education.
Ministers arriving for this morning's session were keen to stress that fairness would be top of their agenda when framing cuts.
However, Government Chief Whip John Curran admitted that the social welfare bill would have to be reduced to meet targets.
Minister for Communications, Energy and Natural Resources Eamon Ryan said there is no denying the difficult choices that have to be made.
Mr Ryan said the Government's job is to get a Budget that works and that gets Ireland out of the economic difficulties that it is in.
Earlier on RTÉ's Morning Ireland, Minister for Community, Equality & Gaeltacht Affairs Pat Carey said that nothing can be ruled out.
Mr Carey said no decision has been taken on reducing the Budget deficit to 10% by next year.
He said the Government's focus was to meet the 2014 target of 3% and that every area of expenditure would have to be examined.
Last night's meeting at Farmleigh was delayed to allow Minister Lenihan return from a meeting with EU Commissioner Ollie Rehn.
The subsequent discussions focussed on preparations for the Budget according to a spokesman, but Europe and the markets may be more interested in the four-year plan now due in three weeks' time.
That will chart the pattern of painful cuts across that period and will be the focus of this week's debate in the Dáil.
Final decisions on where the axe will fall in December's Budget will not be taken until tax receipts for this month are to hand.
Opposition briefings
Briefings of the Opposition finance spokespersons by officials in the Department of Finance resumed this afternoon.
Sinn Féin's Arthur Morgan had an hour-long meeting this morning, while Labour's Joan Burton arrived at the department at lunchtime. Fine Gael's Michael Noonan was briefed by Finance Minister Brian Lenihan this afternoon.
This is the third time Opposition spokespeople have met with Department of Finance officials.
Elsewhere, Davy Stockbrokers has lowered its forecasts for the economy this year and next year, warning that Budget measures are likely to affect consumer spending.
It expects gross domestic product to rise by just 0.3% this year, compared with its previous forecast of 0.8% growth.
Davy also expects gross national product, which excludes profits from multinational companies based in Ireland, to fall by 1.5%, compared with its previous forecast of a 1.2% fall

This is gonna hurt the government has decided to frontload the pain which I believe is a good idea but it still wont be nice. The talk is of a 7billion cut in the budget across all areas and various tax rises and stealth charges then the budgets after will be in the 2 to 3 billion mark for cutting.

I suggest implementing in full the McCarthy Report otherwise known as Bord Snip Nua (translation New Snip Board) our public service is far too bloated for such a small country.

[Louis VI the Fat]

The Government must bring the deficit down to 3% of economic output by 2014 to come back in line with EU rules.

That's so sweet those small countries are actually playing by the rules it is just adorable.

[gaelic cowboy]

That's so sweet those small countries are actually playing by the rules it is just adorable.

Paddy spends it when he has it and when he doesn't he hits for Hollyhead that is the way we are and always will be Louis.

[gaelic cowboy]

On a more serious note there Louis we are too small and far to open an economy to use a stimulus to get us out of the debt and cos were locked in the Euro we cant devalue our way out.

Ireland has an economy heavily dependent on US companies and the UK markets and lastly the EU's open borders therefore we stand on the fence hoping never to fall off and as long as we do we can earn good money being there.

[Tellos Athenaios]

That's so sweet those small countries are actually playing by the rules it is just adorable.

Yeah, oh by the way could you send some good food up here while we do it? Because without other countries starting to see the sense of keeping public spending in check, there might not be CAP money for a glorious sun filled summer reading philosophy and poetry to paraphrase you. Not even if the yields might look better.

[gaelic cowboy]

Budget to prioritise spending cuts - Cowen

Taoiseach Brian Cowen has indicated that spending cuts will take precedence over tax increases in December's Budget.

Spoiler Alert, click show to read: 

The Taoiseach has indicated that spending cuts will take precedence over tax increases in December's Budget.
Brian Cowen was speaking in a special economic debate in the Dáil, which has heard strong criticism of his Government from Opposition leaders.
Mr Cowen said the country is entering a crucial period that would shape Ireland's future and if it made the wrong decisions the repercussions would be critical.
He said the gap between what Ireland earns and what it spends was just too wide.
Not every sector of the economy could be protected in the Budget, he warned.
Fine Gael leader Enda Kenny claimed the Taoiseach had not made a single concrete proposal in his speech, insisting the Government now had neither credibility nor a mandate.
Mr Kenny said Fine Gael would not be brow-beaten into accepting all the terms of the proposed four-year plan.
Labour leader Eamon Gilmore said there should be a 50/50 relationship between spending cuts and tax increases, but criticised the approach of the body known as 'An Bord Snip Nua'.
Mr Gilmore said that Labour accepted the social welfare budget would have to be curtailed, but he also said there should be voluntary redundancies in the public service.
Earlier, the Taoiseach confirmed that the decision to seek €15bn in adjustments over the next four years was taken by the Government.
Mr Cowen was responding to Mr Kenny who asked if the target had been imposed by the European Commission.
'Cuts will hit living standards'
The Minister for Finance has admitted that the €15bn adjustment over the next four years will have an impact on the living standards of citizens.
Following yesterday's Cabinet meeting, Mr Lenihan said the measures are needed to put the public finances back on a sustainable footing.
The EU Monetary Affairs Commissioner Olli Rehn will be in Dublin early next month to discuss the four-year framework plan with the Opposition and the social partners.
It is thought likely the four-year-plan will be formally published shortly after Commissioner Rehn's visit.
Speaking on RTÉ's Morning Ireland, Minister for Tourism, Sport & Culture Mary Hanafin said it would be premature to talk about changes to public service pensions but that all departments were being examined.
On the same programme, Fine Gael Finance Spokesperson Michael Noonan said his party did not accept the €15bn figure.
Reacting to yesterday's announcement, employers' group IBEC said the target is challenging but necessary to guarantee the country's credit worthiness.
The Congress of Trade Unions said the announcement confirmed its belief that the 2014 target needs to be extended.
Exports increase
Despite the recession, figures from the Irish Exporters' Association have shown a strong increase in the value of goods and services exported from Ireland in the third quarter of this year.
The Association said total exports of €40.4bn were up 9.3% on the same period last year.
The better-than-expected figures during the period were helped by a weaker euro and increased Irish competitiveness

There is some good news at the end of the article

Despite the recession, figures from the Irish Exporters' Association have shown a strong increase in the value of goods and services exported from Ireland in the third quarter of this year.
The Association said total exports of €40.4bn were up 9.3% on the same period last year.
The better-than-expected figures during the period were helped by a weaker euro and increased Irish competitiveness.

Looks like we may just pay off after all

[gaelic cowboy]

Budget represents 'one step back' - Lenihan

The Finance Minister has said the upcoming Budget and economic plan represents one step back for the country after it has taken many steps forward.

Spoiler Alert, click show to read: 

The Minister for Finance has said the upcoming Budget and economic plan represents one step back for the country after it has taken many steps forward.
Brian Lenihan also said the Irish people will still hold on to most of the economic gains they won in the last decade.
Speaking during the economic debate in the Dáil, the minister said following the unprecedented shock to the economy, the country's finances have been stabilised.
On reducing the deficit by 2014, Minister Lenihan said the problems will worsen if action is delayed.
He also said the measure in achieving that target will be painful, after earlier admitting that the €15bn adjustment over the next four years will have an impact on the living standards of citizens.
Responding, Fine Gael's Finance Spokesman said things are bad and that people are down and depressed. He said there is no growth, no hope and no economic plan.
Deputy Michael Noonan said the 3% deficit target can be achieved by a €9bn adjustment. He said Fine Gael was not buying into the €15bn figure announced by the Government.
He also said the Finance Minister's and the Government's biggest problem is that no one believes him anymore and that credibility has been lost.
He said the dynamic of change must now take place.

In the interests of informing our masters of the universe in Berlin I will post the odd article here on the budgets and cuts etc etc.

[Vladimir]

By "take precedence" does he mean you'll have both spending cuts and tax increases?

[gaelic cowboy]

By "take precedence" does he mean you'll have both spending cuts and tax increases?

The short answer is yes but there will be no change to corporation tax and there really talking about things like water charges, property taxes and other taxes.

[Vladimir]

The short answer is yes but there will be no change to corporation tax and there really talking about things like water charges, property taxes and other taxes.

Thank you. Sounds like tough times are here for a while.

I doubt the U.S. will see solvency until after the baby boomers pass.

[drone]

To help out, I will drink lots of Murphy's Stout. Anything to help our Irish friends out.

I doubt the U.S. will see solvency until after the baby boomers pass.

And take Social Security with them

[gaelic cowboy]

To help out, I will drink lots of Murphy's Stout. Anything to help our Irish friends out.

Good man I will have a word with the head of the plant to make sure the Virginia bound stuff is top notch as a thank you.

Thank you. Sounds like tough times are here for a while.

I doubt the U.S. will see solvency until after the baby boomers pass.

And take Social Security with them

Pensions were never supposed to be paid out the average life expectancy at the time was less than pension age but by the time they came to pay out life expectancy had increased.


Were lucky in that our age profile is young so no big Social Security nightmare for us yet and I suspect we will never be implement it ever now.

[Strike For The South]

So is this for all of the UK?

[gaelic cowboy]

So is this for all of the UK?

Goodness dont confuse the two of us Strike there altogether

[Strike For The South]

Goodness dont confuse the two of us Strike there altogether

:).

[gaelic cowboy]

Well the government revealed today that 6 billion euro will be chopped this year then 2.5 to 3.5 billion every year after making up the total 15 billion to make the 3% GDP target in 2014.

Still there is nothing to be done but get to work and do with a bit less even if we do bust the whole country Irish people are not the type to go and smash the place.

Time to get on with earning a wage and stuff those bond traders

Budget adjustment for 2011 to total €6bn

The Government has said it plans to take measures totalling €6bn in December's Budget as the first step in its efforts to bring the deficit in line with EU targets by 2014.
This is double the amount Finance Minister Brian Lenihan signalled in last year's Budget.

Spoiler Alert, click show to read: 

The Department of Finance this afternoon published an Information Note on the Economic and Budgetary Outlook 2011-2014.
The Minister anticipates that this package of measures will reduced the debt to GDP ratio to between 9.25% and 9.5% next year.
The Government has decided that a consolidation package of €15bn will be required over the next four years, if it is to achieve its 3% deficit target by 2014.
Minister Lenihan said in a statement 'I want to stress again the strength of the Government's resolve to return the country to a sustainable fiscal position.
'I am well aware that such measures will impact on the living standards of everybody. But our spending and revenues must be more closely aligned. This is the only way to ensure the future economic wellbeing of our society.'
'By the end of 2011 we will have implemented over two-thirds of the overall adjustment and we will be on the path toward renewed budgetary sustainability,' he added.
In announcing the adjustment of €6bn, the Department of Finance did not include details of expenditure and revenue measures, however the statement does say 'It is assumed... the majority of the adjustment takes place on the expenditure cuts.'
Fine Gael's Michael Noonan has said he came out of a briefing on the proposed adjustment figures with 'very little confidence' that the Government understands what the country needs.
He said the people wanted some confidence and hope from the Government.
Earlier, Sinn Féin's Arthur Morgan also criticised the Government strategy, saying if cuts could fix the economy it would already be fixed

European Commission welcomes news

The European Commission has said the Government's target of a €6bn cut in the 2011 budget was 'appropriate' and it welcomed the Government's decision to 'keep the finances on a sustainable path.'
In a statement, the EU Commissioner for Economic and Monetary Affairs Olli Rehn said he welcomed the Government's 'continued commitment to reducing the deficit to below 3% by 2014.'
He said it provided an important anchor for financial markets and also underlined the Irish authorities' commitment to putting the public debt on a sustainable downward path in the near future.
The Commissioner, who is due to be in Dublin on Monday and Tuesday, said 'difficult but necessary policy choices are still to be made as regards the measures needed to reach this objective.'
In this context, a 2011 budget involving a consolidation effort of €6 billion, as indicated in the note, would be appropriate, as it would strike a balance between allowing the recovery to strengthen and addressing budgetary challenges in a timely and frontloaded fashion.'
The statement added that during his stay in Dublin, Mr Rehn will also discuss the economic situation and the challenges to the Irish economy and citizens with representatives of Irish political parties, the social partners and the Central Bank

If your some kind of economics junkie here is the PDF provided by the Department of Finance today

[Vladimir]

I think Ireland will be just fine. You've been through much worse.

It's strange that there's such a large cut up front.

[gaelic cowboy]

Basically the government is afraid if we have poor growth next year that the pressure to row back the cuts might derail the plan.

One thing everyone here is pretty adamant about is that things have been waaaaayyyy worse here before. My one fear and I believe it is maybe 30% possible is it may be forced on us to default if the other weaker economies went to the EU/IMF in order to stablise the Euro. At the minute the high bond markets at over 7% mean nothing as were not actually selling bonds till next year so we have one chance to get this right for next year when we require funds again.

[Louis VI the Fat]

Irish people are not the type to go and smash the place.

What the Irish do, is more subtle but far more devastating: they leave the island.

History has returned, Ireland is losing its sons and daughters to emigration again. Sad.

[gaelic cowboy]

What the Irish do, is more subtle but far more devastating: they leave the island.

History has returned, Ireland is losing its sons and daughters to emigration again. Sad.

Indeed

Incidently the government figures are based on 40,000 people leavin plus cuts plus extra charges like for property etc.

It's not that Ireland cannot support a higher population, it could support 3 or 4 times the current level in my view. The problem is Bert and his FF mates bought industrial peace both public and private sector at the price of our industrial competitiveness, they let wages inflate to allow the property bubble to take up the slack of the both the foreign and Irish companies after 2002/3.

It can be seen in official figures now that the companies I used work for like Intel and the like started to count for less and less in the economy in early 20002/3, the economy should have contracted to a slightly more normal level of growth but there developer mates needed saving and cos there was an election that year they let rip.

Any pretence of probity was abandoned and he shut people up with cash, Bertie Ahern the man who brought peace to the North (ha yea right) made his own country a desert.(yes i know it's hyperbole)

Our government is in debt because our tax base has collapsed and a toxic financial vampire like Anglo Irish Bank just wont die they bailing the out and they keep ending up needing more cash.

I annoyed now maybe I might take some time to compile a thread for the backroom in case anyone wants to read a horror story and scare the kids in the meantime here is a fairy story instead

[Strike For The South]

What the Irish do, is more subtle but far more devastating: they leave the island.

History has returned, Ireland is losing its sons and daughters to emigration again. Sad.

Are they coming here again?

[gaelic cowboy]

Are they coming here again?

USA, Austrailia, New Zealand, UK and Canada plus the rest of the world but it doesn't really count the rest of the world does it.

[Strike For The South]

USA, Austrailia, New Zealand, UK and Canada plus the rest of the world but it doesn't really count the rest of the world does it.

I don't understand why it's so hard to stay put. Does Ireland smell? Is it cramped?

Don't get me wrong I love red hair, plae skin, and the accent as much as the next guy but we moved on to brown immagrants like 50 years ago. Did no one tell you?

[rory_20_uk]

Does Ireland smell? Is it cramped?

All sorted.

[gaelic cowboy]

I don't understand why it's so hard to stay put. Does Ireland smell? Is it cramped?

Don't get me wrong I love red hair, plae skin, and the accent as much as the next guy but we moved on to brown immagrants like 50 years ago. Did no one tell you?

Oh it's all covered in the secret treaty between the Pope the NWO and Guinness

[gaelic cowboy]

A PDF of some boring economic data from EUROSTAT that cheers me up a bit about our economy paying back the debt

Annual comparison
In September 2010 compared with September 2009, production of capital goods grew by 7.5% in the euro area and by 8.7% in the EU27. Intermediate goods increased by 6.8% and 7.5% respectively. Production of energy rose by 1.8% in the euro area and by 0.8% in the EU27. Non-durable consumer goods gained 1.6% and 2.5% respectively. Durable consumer goods fell by 0.2% in the euro area, but increased by 2.2% in the EU27.
Industrial production rose in all Member States for which data are available, except Greece (-7.6%), Portugal (-2.4%) and Spain (-1.4%). The highest increases were registered in Estonia (+31.1%), Latvia (+19.0%), the Czech Republic (+12.2%), Poland (+12.1%) and Ireland (+10.9%).

Irish industry outstrips euro zone
Updated: 12:06, Friday, 12 November 2010 RTE News
Ireland has recorded the biggest month-on-month rise for industrial production across the euro zone, official figures have showed.
While industrial production across the euro zone fell by 0.9%, Ireland bucked the trend, surging 7.9% in September compared to August.
Ireland also showed the fifth highest rise year-on-year from September 2009 to September 2010.
The estimates were released by Eurostat, the statistical office of the European Union.

Now if those bond traders would just off with the irrational herd behaviour elsewhere things would be grand.

You know things are funny when the old people up and down country supping and cooling over a glass of porter on pension day in pubs all over Ireland are comparing City bond traders to "There the new Tan's I tell ye" while playing a game of 25.

Daily discourse here now revolves around having an intimate knowledge of the interest rate on the second hand bond market in London, every up and down is watched by people who until the year before last probably thought a Bond meant Jimmy Bond from MI6.

[rory_20_uk]

It's not just human traders, it's the armies of AI-bots who buy and sell based on specific criteria, so the smallest change can be amplified so quickly.

[gaelic cowboy]

It's not just human traders, it's the armies of AI-bots who buy and sell based on specific criteria, so the smallest change can be amplified so quickly.

And yet those bots failed to save them from crashing the world with all those CDO's an SIV's I think we need a bit of inefficiency in the City style financial industry if you ask me.

Massively efficient highly financialised industry kills itself really the old style ability to take advantage of a difference in price disappears in nanoseconds.

[rory_20_uk]

They can't make a game AI work in a completely walled system, underpinning the capitalist world on then isn't going to be clever either.

[gaelic cowboy]

They can't make a game AI work in a completely walled system, underpinning the capitalist world on then isn't going to be clever either.

Excellant point