‘Anti-austerity candidates could damage economy’

The parties and independent candidates that campaigned on anti-austerity agendas and made gains in the local and European elections could do enormous damage to the economy if they repeated this success at the general election in two years, according to economist Jim Power.

“The thought of its scares the living daylights out of me,” said Mr Power speaking at the Friends First economic outlook presentation in Dublin.

He argued that Ireland is a small open economy that is heavily reliant on attracting foreign investment and skilled labour to work in this country. Mr Power declined to name any parties or individuals in particular.

Rather he cited policies such as defaulting on debt and proposed tax hikes as having the potential to wreak havoc with the economy.

He hoped that last weekend “was a massive protest vote” and that in two years time, before the general election, most Irish people will realise that what these parties and individuals stand for is “totally alien to what we stand for”.

Mr Power, who helped campaign for a local election candidate, found on the doorsteps that the overwhelming source of disaffection among voters were issues relating to the health service and in particular medical cards.

The Government is scheduled to introduce €2bn in budget cuts October 14 agreed with the troika in order to reduce the deficit below 3% in 2015.

Mr Power urged the Government to implement a neutral budget apart from the €500m planned in water charges.

“I would argue that at this stage €2bn could do more harm than good and could cause the Government to miss the budget deficit next year.”

Mr Power has forecast GDP to grow by 2.1% this year and 3.8% next year, with GNP expected to grow by 1.5% in 2014 and 3.2% next year.

He forecasts unemployed to drop to 11.4% by the end of this year and 10% by the end of next year.


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