This post outlines how Ireland got into its economic mess, how deep the hole is and what the country must do to get out of the hole. Understanding what mistakes were made is a key part of the problem: this post outlines five, four of which date from entry into the eurozone. The fifth, the blanket guarantee in 2008, has given us a €60bn problem but we should not forget that it’s only half the size of the deficit problem. The post then outlines three questions voters should ask politicians who knock on their door over the coming weeks.
This post examines whether the Government’s pledge to reduce the deficit to 4% of GDP by 2014 is consistent with its promise not to cut its workers’ rates of pay. The chief concern is that, with tax receipts unlikely to grow by more than 10% over the coming five years, an adjustment in expenditure of €10bn – needed to meet EU (and thus market) expectations – will have to come from non-pay expenditure. No matter which way the numbers are cut, with public sector pay off limits, this is a tall order.
The Irish government will spend €64bn this year, having raised barely half that amount in taxes. Realistically, public expenditure needs to be cut by about €15bn. The bulk of current expenditure is in Social Affairs, Health and Education. This post outlines how, even without major reforms, better use of taxpayers money could save €6bn across these three areas.
