Lenihan: Too early to talk about recovery

FINANCE Minister Brian Lenihan has bluntly admitted it is “too early” to be talking about economic recovery.

That contrasts starkly with the pre-election speech delivered by Taoiseach Brian Cowen in which he predicted economic growth could resume here next year.

In that speech in Slane on May 21, Mr Cowen said: “The ESRI and other commentators are now predicting that the decisions taken by the Government, allied with the flexibility of our economy and our people in reacting to the crisis, means that we are positioned to return to growth, even rapid growth, as the world economy turns, as early as next year.”

But Mr Lenihan, while similarly defending the Government’s policies yesterday, struck a very different tone on the issue of recovery.

“It is too early to talk about recovery, but we do have a clear strategy to lead us out of our current difficulties,” he said.

Addressing the diplomatic corps at a function in Dublin Castle yesterday, Mr Lenihan said the Government had acted promptly and taken “the necessary steps to address both the fiscal and banking crises and in order to improve Ireland’s competitiveness”.

But obstacles remained, he said, in reference to the December budget, when the Government will aim to cut public expenditure by a further €4bn.

“We know that there will be difficult decisions, difficult choices to be made, but we recognise that such decisions are necessary if we are to be successful,” he said.

A key element in deciding where the axe will fall will be the report of the Special Group on Public Service Numbers and Expenditure Programmes, more commonly known as Bord Snip.

It was reported yesterday that the document – which has gone to Mr Lenihan – suggests the Government could save about €1bn by cutting 20,000 public service jobs.

But a government source stressed that the recommendations in the report were merely that – recommendations – and would not necessarily be implemented.

This was a point made earlier this week by Mr Lenihan himself, who told the Dáil: “The Government is not necessarily committed to the report. It offers the Government and the political system realistic options on expenditure which will require to be evaluated.”

Political and economic realities will influence the Government’s decisions on what recommendations are fully or partly implemented.

Mr Lenihan is expected to present the Bord Snip report to cabinet this week.

A decision will then be taken on whether to publish the document.

The Taoiseach appeared to suggest on Friday that the report could be published, although he stressed the cabinet would take time to consider it first.

“We want the people to know, to the greatest extent possible, what the range of options are,” he said. “It would always be our intention that people are informed to the greatest extent possible – it is the best way of ensuring that people understand the approach of Government and why it has to look at various issues it wouldn’t normally have to.”