Economy in crisis - Everything depends on this budget

WITH less than a week to go before Finance Minister Brian Lenihan throws the dice one more time to try to turn the tide threatening to swamp us all, the pot is beginning to simmer nicely.

Anger and despair, frustration and self-interest, denial, delusion and a festering sense of being hard done by are turning otherwise calm, rational people into snarling refuseniks, each convinced that the solution to this escalating crisis is in someone else’s pocket.

This bitter division is taking root in a vacuum, a space left empty because of a lack of leadership worthy of the name or, ever more obviously, worthy of the challenge.

Yesterday in London we saw G20 summit protesters force their way inside a Royal Bank of Scotland office amid violent clashes with police. As the offices were wrecked some of the world’s most powerful political leaders gathered to see if they could agree on a unified approach to the crisis. Only time will tell if they have, but in reality we have very little time at all.

It may not be long more before we see similar demonstrations in this country, and yesterday’s unemployment figures moved that prospect all the closer. Unemployment rose to a record in March, adding to pressure on the public finances as the Government grapples with a soaring budget deficit.

Benefit applications, adjusted for seasonal swings, increased by 20,000 to 372,800 in March, the highest since records began in 1967. The unemployment rate jumped to 11%. Some 173,300 people joined unemployment lines in the last 12 months.

To add to the sense of looming calamity, and in a scene straight out of John Steinbeck’s Great Depression classic, The Grapes of Wrath, more than 700 people queued outside a Dublin friary for food parcels yesterday. It’s hard to imagine that in less than a year Bertieland — that place of plenty, that place of boundless opportunity, private helicopters by the squadron, dig outs in every bar and week-long wedding parties on Mediterranean yachts — that nearly 1,000 people are desperate enough to queue for food.

Yesterday we saw the other side of that coin, too, when it was reported that Irish academics earn almost twice what their British counterparts earn. Indeed, in many instances Irish academics’ pensions are greater than British academics’ salaries.

Our academics should not feel isolated, though. The reprehensible behaviour, until yesterday at least, of the judiciary in refusing to even consider a pay cut at this time is as divisive as it is unacceptable. If, in the next week they feel unable to join the real world, we must hope that Mr Lenihan will use next Wednesday as an opportunity to give himself whatever powers he needs to impose rather than request such a cut. In reality, all of our higher paid public and civil servants must expect substantial pay cuts.

As Ivan Yates points out elsewhere on this page, we have become used to unsustainable government costs, and unless we confront them we are doomed to a never-ending but pointless cycle of paring and scrimping.

All around the world we are beginning to see what failed countries look like. We still have some small time to ensure that we do not become one. Let us hope our politicians can find the conviction and the gumption to do what is right.

We will know next Tuesday if they have.

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