ESRI upbeat on Ireland’s debt sustainability
In an upbeat assessment of the sustainability of Ireland’s debt, research professor at the Economic and Social Research Institute (ESRI) John Fitzgerald, said the forecast was entirely dependent on “a successful resolution of the current Euro area crisis” in the coming months.
“Everything that’s happened in the last nine months suggests that things are slightly better than we thought, not slightly worse,” he said.
Mr Fitzgerald told the Joint Committee on Finance that while the austerity package and agreed cuts were not easy options, they were creating a path out of debt.
“There are no easy options in tackling the current levels of debt facing the Irish government. The current programme of austerity, with an agreed package of cuts totalling €30bn over the period 2008-2014, will, on these assumptions, be sufficient to all but eliminate the primary deficit by 2013,” he said.
However, Mr Fitzgerald warned that if growth were to prove less than assumed in the Department of Finance estimates, it would not be sufficient to stabilise the debt-to-GDP ratio before 2015 without additional action having to be taken.
The ESRI economist also advised the Government against any more than the €3.6bn in cuts planned in the upcoming budget, until European leaders sort out “the mess” of the Euro debt crisis.
Mr Fitzgerald told the committee that the key to the long-term sustainability of the Irish debt will be a return to sustainable medium-term growth.
“In planning for recovery a critical additional strategic hurdle faces Irish policy makers — the need to return to the financial markets in 2013 in order to fund substantial debt repayments in 2014. If this can be satisfactorily accomplished then the position of the government will be facilitated by the prospective lower funding needs in 2015,” he said.
Mr Fitzgerald said that, to prepare for this return, it will be important to fully implement the adjustment in the public finances agreed with the Troika “to provide confidence to Irish citizens and to the wider financial community that Ireland is on a sustainable growth path”.
The economist told the committee that, in the context of an economic recovery, the eventual sale by the State of its stake in the pillar banks could see a substantial once reduction in the long-term debt burden.
Sinn Féin’s Pearse Doherty questioned if the ESRI’s debt projections were credible.
However, Mr Fitzgerald stressed that Ireland’s performance in the last nine months proved “we can do it and we are doing it.”
TAXPAYERS will fork out more than €500,000 for each TD and senator next year, new figures reveal.
The bill for Oireachtas members, including wages, travel expenses, assistance and general running costs of Leinster House, is estimated to be €115,590,000 in 2012.
That works out at €508,000 for the 166 deputies and 60 senators when the €717,000 cost of members of the European Parliament — who are paid via Leinster House — are excluded.
However, the overall Oireachtas cost is down from an estimated €127m for 2011.
Despite “austerity” being the watchword when it comes to tax rises and spending cuts, the travel expenses bill for TDs and senators is set to soar next year to €5,247,000 from €4,839,000 this year.
Other expenses and allowances for Oireachtas members will hit €7,765,000 in 2012.
The salary bill for TDs and senators alone comes in at nearly €20m for next year, while travel costs for members of the Oireachtas is set to top €5m in 2012.
