Cowen: We could have ended up like Greece

IRELAND would have ended up like Greece and “lost our economic sovereignty” if the budget policies of the opposition had been adopted, the Taoiseach claimed.

Brian Cowen told the Dáil the European Union has not demanded the Government adopt harsher cuts than the €3 billion planned for December’s budget. “The strategy that the Government has been pursuing since July 2008 has been vindicated” by recent events in Greece, he said.

And saving measures will have to be “pursued vigorously” for the next number of years “or the markets will punish us severely.”

The EU is now expected to take a more stringent role in policing the finances of eurozone member states.

But Mr Cowen said there has been “no formal or informal indications from the European Union that they require or expect anything beyond that level of adjustments at this point.”

During Leaders’ Questions in the Dáil, the Taoiseach said while “there is no room for complacency and no room for self congratulation in our situation”, Ireland has established “a degree of credibility” with budget measures that have already been taken.

“It is not envisaged that we will have a need for a budget earlier than the end of the year, thankfully, because the strategy we have adopted is working.”

Had the budget proposals of the opposition parties been adopted, “we would be in a very severe crisis relying on supports that would effectively remove our economic sovereignty,” according to Mr Cowen.

He said market volatility and what has happened in Greece shows his Government was right to implement a €4bn adjustment for this year.

“The Government was right to resist suggestions about prolonging the period of adjustments which was something that was mentioned in the public debate at the time, mentioned in this House as well, that we should have had a period of adjustment that was longer than the period up to 2014,” he said.

Fine Gael leader Enda Kenny said he welcomed the €750bn stabilisation fund agreed by EU finance ministers, but said he was “disappointed the Dáil did not get to discuss that before the minister went out”.

Labour Party leader Eamon Gilmore, welcomed the agreement, but said the implications had to be clarified, particularly whether there would be a greater level of EU oversight in Ireland’s budgetary decisions.

Draft laws allowing Ireland to participate in the Greek bailout were presented to cabinet yesterday and will go before the Dáil next week.


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