The gospel according to Charlie
Things are tough, but Ireland will still come out of this slowdown reasonably well, he predicts.
But he warned the boom days are over and that the next few years will not be a romp in the park, by any stretch of the imagination.
Despite the failure of the global economy to pick up last year and the prospects of very little recovery in 2003 the minister says there is little we can do about events outside our control, but we do have the ability to manage our own internal affairs, he said.
On that, he pledged that as Minister for Finance he will stick to his spending target of 7% in 2003.
There is no need to doubt him on that, he said.
"If people only looked at the form book they would realise that in each of the last five Budgets spending was just about 1% above the figures for the revised estimates," he said.
"There was a lot of nonsense spoken about the tax situation last year and about the spending figures, which came in under Budget in the end."
On Government expenditure, the reality is that "departments can only spend what the Oireachtas allows and things will be no different this year than last", he vowed.
Given the current climate it is also vital that wage demands are kept reasonable.
"We will need a responsible attitude all round, but if we do the right things then Ireland will enjoy modest growth in the coming years."
Much will depend in the short term on the resolution of the Iraq conflict, he said. If that becomes a drawn out process then we will all suffer.
"Oil prices will go up resulting in a transfer of resources to oil pricing countries.
"Ireland would be hit by a double whammy, because the markets we would be selling into would be buying less while costs here would be going up, making us less competitive overall in a shrinking global market. That is a real worry," he said.
If the Iraq war turns into a protracted affair it will have serious implications, not just for Ireland but for the global economy, he said.
Even with the overall economic scene quite tough Ireland will do better than most, but the level of growth will be "much more modest", he said.
He warned also against too much pessimism. "If you keep telling people things are bad they are bound to answer 'Yes they are' when you put the question to them."
Having issued that reprimand he said we faced several key issues that will determine our economic future.
In typical McCreevy fashion, he warned jobs will be lost in the sectors that have ceased to be low cost. But he also expressed relief that the carnage since the hi-tech meltdown started has not been as bad as he thought it would have been.
What the future holds will be determined to a very significant degree by how the global economy performs in the years ahead, he said.
Last year, economists expected the global situation to improve in the second half of the year.
"That did not happen. Now they are saying it will pick up in 2003. Maybe it will."
But his own judgment is that "2003 is not going to be good".
There are too many "imponderables out there and the Iraq war is just another negative standing in the way of recovery in 2003", he said.
He flatly rejected the idea that we blew the benefits of the Celtic Tiger or that the Government pandered to the public sector by allowing benchmarking to go ahead.
"The danger always in dealing with the facts is that some people take the totally pessimistic side of things and that runs the danger of destroying confidence.
"We are in a better position than most of our other European neighbours and are in a better position than they are looking into the future."
But we have to get our inward investment right to replace the jobs lost over the past 18 months, he said.
"What we are going to lose, and we have lost over the past 25 years, are the industries and the jobs where we cannot compete in terms of cost."
We have to wake up to the changing dynamism in the economy, he said.
"The reality is that we are no longer a low-cost producer and we are no longer a low-wage economy."
And the implications of that are that businesses, whether multinational or national, operating from a high-cost base "are not in the ballpark any longer and will go out of business", he said.
For that reason the next phase of inward investment will have to involve a large element of research and development (R&D) in their projects, he said.
"When R&D comes with a company then you have them really as a long term part of the economy," he said.
On allegations that the Government blew the benefits of the Celtic Tiger the minister laughed at the suggestion.
"Look what we have achieved during the period in terms of employment, unemployment and in bringing down the national debt," he said.
"We have seen a doubling of spending from 18 billion to 36 billion. The suggestion is a nonsense given the extraordinary things that we have achieved."
Finally, on the election overkill allegations he spoke for all the parties when he rejected out of hand that suggestion.
Everyone knew on the basis of the quarterly figures that the economy was slowing down.
The Central Statistics Office figures showed the economy was slowing considerably.
"Everybody knew that," he said. "Did you really expect that each party was going to come out and say things are going to be absolutely desperate don't vote for us.
"I mean for God's sake. Can anyone remember an election campaign that was done anywhere in the world along those lines? I say no," he said.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
