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Dublin: 12 °C Monday 20 May, 2013

Greece to press on with austerity, as Irish people split on next budget measures

A poll finds people in Ireland are almost evenly split on whether the government should press on with austerity or ease off in the December budget.

A banner held aloft during a protest in Greece calling for an end to salary cuts.
A banner held aloft during a protest in Greece calling for an end to salary cuts.
Image: Nikolas Giakoumidis/AP/Press Association Images

THE GREEK PRIME Minister has vowed to press on with austerity measures in order to meet savings targets that will ensure international loans continue to flow.

George Papandreou delivered his annual speech on the economy in the Greek city of Thessaloniki last night, PA reports,  in which he said the major concern was to keep Greece solvent amid a mounting debt crisis that has forced it to seek two EU/IMF bailouts over the past year or so.

As he spoke, protesters clashed with police on the streets. At least 20,000 people were involved with police arresting more than 100 people, according to BBC News.

“We will push through all the major changes our country has needed for years,” Papandreou said in a nationally televised address. “And we will take whatever other decisions are needed, we will do whatever is necessary to keep the country on its feet.”

After weeks of inactivity, the country is pressing on with austerity measures which include reforms of the public sector and the likely culling of civil servants, once hired on the promise of a job for life.

Papandreou is today meeting with his cabinet to discuss extra measures, including new taxes, in order to meet the 2011 deficit targets agreed with lenders, AP reports.

Greece is required to cut budget overspending from 10.5 per cent to 7.6 per cent of GDP this year, the Telegraph reports.

Market fears were stoked following the resignation of the top European Central Bank (ECB) official Jürgen Stark amid controversy over the ECB’s programme to purchase government bonds in the open market, a practice heavily criticised in Stark’s native Germany.

Ireland’s austerity

Meanwhile a poll in today’s Sunday Independent, has found that 49 per cent of people in Ireland favour the country continuing down a road of austerity in the next few budgets in order to meet EU/IMF savings targets.

This is in contrast to 51 per cent of people who think Minister for Finance Michael Noonan should ease back on the austerity measures.

The poll followed a positive report from the European Commission this week in which it said the country had made “important progess” in its financial recovery.

Noonan is expected to cut between €3.6 billion and €4 billion in the December budget through savings and possible tax rises.

The Taoiseach Enda Kenny said this week that “everything is on the table” ahead of the budget.

Read: New bailout deal will reduce debt quicker than expected – ESRI >

Read: We’ll need EU-IMF permission to freeze income tax rates – Kenny >

Read: Front-loaded budget ‘could push economy to breaking point’ >


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Comments (29 Comments)

  • The only Austerity in Ireland is for the people that can’t afford it, Politicians, Bankers and the very people that caused this mess ie Brian “the gobshite” Cowen, Bertie “I don’t give a F**K about anybody but myself Ahern and all the rich people in this country are still getting away scot free, alas Fine Gael are heading in the same direction as Fianna “FAIL” look after yourself and make the lower and middle class in this country pay for it. Every politician in this country has a massive pension pot lined up for themselves and this will never change.

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  • before attacking working families with extra taxes, the social cancer of welfare fraud must be tackled

    Between ?2-3b every year is stolen from the tax payer, a zero tolerance approach is long overdue

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  • “in contrast to 51 per cent of people who think Minister for Finance Michael Noonan should ease back on the austerity measures.”

    what alternative do they propose? bankruptcy? default?
    Have they thought this though?

    This reminds me of people who stop taking antibiotics because they are feeling better and are then surprised when their infection returns

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    • I think your confused about the 51% who are in favor of easing back on austerity measures there not suggesting that all the work is done and that austerity measures should end, if we use your metaphor of the antibiotics, the 51% are arguing that "you’ve been prescribed a very aggressive antibiotic for the last three years, the results are favorable were now going to reduce the dosage"

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    • Fair point Damien,
      the 51% contains the full spectrum of people (from those who want to slow down cuts only a little, right up to those who want no further cutbacks at all)

      Reducing Austerity would make sense if the economy was growing, but since it’s largely stagnant, delaying closing the budget deficit will simply lead to a bigger total national debt.

      To continue the antibiotic metaphor, reducing the dose of antibiotics at this stage may well still lead to recovery from illness, but we will spend more time in intensive care than if we stuck with the higher dose of unpleasant medicine

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    • Tom, austerity leads to economic contraction which leads to lower tax take which leads to austerity which leads to economic contraction which leads to ………
      Do you detect a trend in this? Bottom line is; it doesn’t work. If it worked the Irish people would have no issues with it.

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    • Neil 11/09/11 #

      Oil,
      If you say there should be no cuts or tax increases, then what is your plan? Tell the IMF and ECB to stick their bailout and go to unilateral default? Because nobody else is going to give us money right now. We’d have to balance the budget overnight and you’d see austerity on a level not seen yet.

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    • Oil Foster, I have heard this deflation argument many times before and I think its a red herring.

      If you were right, then the solution would be to borrow large amounts of money to pay to our selves to boost the economy (presuming that the boost would outweigh the cost of the loans)

      Ireland is a small extremely open economy.

      If the government borrows 1 million euro + spends it, they get some of it back in tax and reduced unemployment, but the rest quickly disappears over seas.

      E.g any activity in Ireland that uses energy is exporting wealth overseas, since most of our energy is from foreign sources
      if you fill your car with petrol, where do you think most of the money ends up?

      The export industry the only thing that generates real wealth, it brings real cash into the country, this is largely unaffected by government spending.

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    • Tim, you are spot on with your analysis.
      Ireland attempted to spend it’s way out of trouble in the 70′s and 80′s and ended up in more trouble.
      In 1982, they attempted to correct the finances by cutting spending and raising taxes. This also failed.
      In 1987, the government cut spending and reduced taxes. This kick started growth in the economy.

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  • How many of you Were asked in this poll for your opinion and how many of your friends were asked of their views in this poll. It’s all a load of bull these opinion polls. In every day life I deal with from colleagues I work with to the man in the shop the woman on the street my neighbours are all pissed with this government and how it’s dealing with homeowners and taxes and corruption. This country is so corrupt from the top right down it’s ranks and any one who defends this is either mentally I’ll or in the pocket of corruption. Opinion polls don’t believe them we all know from our every day experiences how the true opinion polls would read.

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  • Can we please stop taking the SINDO Quantum Research polls as being accurate. This was the polling company that once put Fianna Fáil support on 9% and the paper who predicted that Labour would become the largest party after the election.

    SINDO QR also has a poll today which shows 39% of people want Norris back in the Áras race and that 40% of respondents would vote for him. So 1% want to vote for Norris but don’t want him in the race? Either the SINDO is making up the numbers or there’s 1% of the population who need to see a doctor!

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  • The current government has broken many of their manifesto promises. The point in voting for either party was to get away from the cynicism and political dissembling that marked the past FF/PD era. Regrettably, both FG and Labour continue to honour the tradition of treating the aspirations of the bulk of the electorate as disposable. Debates, a term to be used guardedly in Ireland, over bank bailouts, NAMA and mortgage debt discounting have been dominated by interest groups in the most part sheltered from the worst impacts of the recession. The bottom line from the government is that there can be no let up in pressure on average earners to pay for the excesses of many above average earners. How on earth can Noonan praise more austerity and yet ready the public purse to disgorge upwards of a billion paying the legal costs of various tribunals. Only a banana republic could brazen it out.

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    • The government has no manifesto. Individual parties had a manifesto and when a coalition was formed so was a program for government… By both government parties. It was published and available to the public. So far it has been followed to the letter.

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  • It’s time to push the debt out, it’s a five year country loan when it should be a 10 year mortgage. It’s going to take alot more time to sort out illegal banking practices both in the stock and bond Market, it is a system that is rotten to the core both at a government level and corporate level. With neither admitting there is a problem. Instead we are continuing on with a broken system that is not being reformed in any way. What is needed is some real leaders to stand up and stop this corrupt and frankly dirty banking which are continuing the same buying and selling of credit default swaps which where a major factor in the cause of the 2008 crisis. Stop the banks stop the bullshit.

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  • 49% in favour? I give up… Completely speechless..

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  • cuts are needed but don’t front load.

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  • http://storify.com/contact_ie/stephen-kearon-and-that-3250-bill-for-hosting-a-we

    Fascinating article about Stevo. Have a look at the website if you are teaching an IT course in “User Experience – what to avoid in a web site.

    Isn’t it gas, how the bishops and the FF’ers are great at preaching. They are so alike.

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  • No government likes making cuts or increasing taxes. However given our situation it’s the only choice we have. Fine Gael objected many times and very strongly to the choices made by the last three governess but this is the situation we are in. Fine Gael will lead us out of a recession and on to prosperity on the foundations of strong and debt free economy. The Irish people voted Fine Gael in to do just this and that’s what they are doing and doing it very well. We take the pain now and soon we will be past this.

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  • Do you really to refer to public sector job cuts as ‘culling’ civil servants? I find that a bit offensive given it’s a term generally used for slaughtering diseased animals or exterminating vermin.

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  • Expansionary fiscal consolidation: Cutting public spending so as to stimulate growth.
    http://economics.com.au/?p=5849

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  • I think it’s gas everyone giving out bout FF ruining the country. We all knew what there were at during the boom but yet they kept getting voted in. No one in the private sector cared what people in the public sector was earning. No one cared that the banks were throwing money around cause people were willing to spend it. People have to start taking personal responsibility for their actions.

    Reply

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