Tánaiste tells delegates Ireland remains at risk of 'further economic shocks'

Tánaiste tells delegates Ireland remains at risk of 'further economic shocks'

By Fiachra Ó Cionnaith

Political Reporter

Tánaiste Joan Burton has claimed the "stable" Fine Gael-Labour Government must be returned because Ireland remains at risk of "further economic shocks" - contradicting a senior minister's belief those warning about the economy are "crying wolf".

The Labour leader made the re-election pitch in her opening ard fhéis speech this morning, telling delegates at the Mullingar Park Hotel in Westmeath the country needs the current coalition to survive any unexpected problems in the world markets.

Speaking just days before the widely predicted decision by Taoiseach Enda Kenny to call the election on Tuesday or Wednesday, Ms Burton admitted "further economic shocks are a possibility".

Acknowledging the instability in the Chinese economy and fluctuations in world oil prices which a growing number of financial experts have warned could affect Ireland's small open market economy, she said:

"That's why as a Government I believe we need the current Government re-elected.

"By any assessment it is fair to say we have put the country firmly back on the road to recovery. That's why stable Government is needed," she said.

The admission of potential future difficulties in the Irish economy due in part to international issues comes just hours after another senior Labour figure, Public Expenditure and Reform Minister Brendan Howlin, said there are too many people "crying wolf" because they failed to predict the 2008 economic crash.

"Because the crash was caused last time by everybody taking their eye off the ball and nobody crying wolf, there is now a whole chorus of wolf criers on the basis that if they keep crying, one of them will be right," he told reporters last night.

While both Ms Burton and Mr Howlin have stressed the current Fine Gael-Labour Government should be re-elected to ensure economic stability, the Tánaiste's acceptance that difficulties could be on the way differs from her Wexford TD colleague.

Despite the coalition's repeated pre-election insistence the economy is growing and beginning to thrive, a number of red flags have been raised in recent months over potential problems which could emerge and what is claimed to be a giveaway 2016 budget designed to win the imminent election.

Last autumn the Irish Fiscal Advisory Council issued a series of warnings about the budget and how it had the potential to destabilise economic growth, while earlier this month the Irish Examiner revealed a leaked post [bailout] programme surveillance report from the European Commission.

The document described the budget as a "political" venture, warned the "recovery is threatened by recent decisions which affect the path to a sustainable budgetary position" and said cutting USC - a key part of the coalition's re-election bid - "undermines the sustainability of revenue in the medium term".

Meanwhile, the Times of London Ireland online edition also reported this morning that European Commission spokesperson Annika Breidthardt has questioned the Government's belief it has €10.5bn of fiscal space, describing the remark as "pre-election campaigning".

"The actual amount will be determined by negotiations which are set to start over the next few weeks. The Irish Government's assumption is that we [the European Commission] are going to be less stringent than previously," she said.

Both Fine Gael and Labour have stressed the economy is improving steadily and returning the coalition is the only stable option for voters.

However, speaking to the Irish Examiner at Fine Gael's ard fheis at the City West Hotel in Dublin last week Finance Minister Michael Noonan also acknowledged international difficulties could cause problems at home.

He said that "at the moment it looks as if we're moving to an uncertain period again", but insisted Ireland is "reasonably well positioned".

"While we're aware of certain external risks we can't just stop doing something because there are some risks," he said.

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