No need to put economy in greater risk

That we are in election mode is as obvious as the proverbial nose on your face. 

A government that hitherto had been reaching into our pockets on a daily basis is now pretending to give something back.

Lest we think this is payback from a government that is grateful for our patience, we should not forget that if it does give us something it’s from money it has already taken from us.

Unfortunately, it’s casting its net very wide in an effort to garner enough votes so that Dear Enda can proclaim himself as the chosen one who finally was able to have Fine Gael succeed in going into government after back-to-back elections.

In doing so and trying to please as many constituencies as possible, there is the greatest risk that the Government, in its quest to be reelected, is putting the economy back in dangerous territory.

Sure, the economy is on the rise.

However, the economy is a long way from being either stable or sustainable. We should equally not forget that we are borrowing close to €10bn each year just to stand still. Those borrowings are growing our indebtedness, not reducing it. The Greek situation is still not resolved. We could still have a Grexit with everything that will bring with it – contagion and possibly even the collapse of the euro.

There is also a risk – even if a Grexit does not happen in the short-term – that the powers that be just might finally accept that the deal ‘agreed’ with Greece will never work in the absence of a debt write-off.

Frau Merkel and Herr Schauble might not agree with that but it still might just be accepted as inevitable irrespective of what they think. If that happens, as a eurozone country and no longer in obvious trouble, we will have to contribute and that contribution could be €1bn.

Unfortunately, Government believes that it can bestow largesse. It has decided that it wants to bestow particular largesse on its own constituency and spread a little more around to all and sundry. In primarily pandering to public sector unions, it has marked all of our cards.

There are many more sectors of this economy which suffered far more damage than the public sector – the poor, the sick, the old to name but a few. Seeing fat cats, like retired or set-aside former politicians, benefiting even further because of a pay link with the public sector angers very many of us. Many of them, in our view, do not deserve what they now get, never mind getting even more.

The Government has apparently decided that there will be some tax cuts. Ironically, the main beneficiaries of its increased pay largesse, the public sector unions, have argued that rather than tax cuts for every one, that Government should increase government spending.

It’s interesting that the response of the brothers – now that they have already been promised something from the cookie jar – is to suggest that those who suffered far greater than the public sector should just have to wait even longer. It’s a clear case of ‘I’m alright, Jack’ in more ways than one.

All of us know how expensive Ireland has become when people on the average industrial wage are having problems making ends meet. Given that the national minimum wage is considerably lower than that, it’s got to be really difficult for those on that wage to get by. Nevertheless, we can only hope that raising the minimum wage at this time by 50c an hour is not going to make an already difficult task even harder.

The EU, IMF et al, has already warned the Government to be prudent in its upcoming budget. They have suggested that government should cut the deficit further. It appears that government is set to ignore that advice. If things do go pear shaped, and we sincerely hope they do not, we will need friends with deep pockets.

Our so-called friends in the EU, ECB and IMF are bigger, tougher, and more ruthless than we are. They are fickle friends and we should be wary of getting on the wrong side unnecessarily. Think of Greece. Is it more important to save Ireland or Fine Gael? No, Enda is quite wrong, they are not the same. There is no need to put the economy in any greater risk than it is in already.

Paul Mills