Gilmore: Troika austerity hawks treat us like experiment

Tánaiste Eamon Gilmore has launched an unprecedented attack on the troika, accusing its “austerity hawks” of treating Ireland like an “economic experiment” and said the €3.1bn adjustment demanded by our international lenders in the budget risked damaging the country’s fragile economy and society more broadly.

“We will not let the Irish economy become some type of economic experiment for austerity hawks,” he said. “Austerity alone is not sufficient for economic recovery or social stability.”

Mr Gilmore, whose party has borne the brunt of the public’s dissatisfaction with ongoing cutbacks, said the full €3.1bn austerity package was not required to enable Ireland meet the bailout programme’s deficit target of 3% of GDP by 2015.

“We are committed to achieving the 3% target,” he said. “But we are not obliged to do more than that, nor should we do more than that. The only argument that has been put forward [for the €3.1bn cut] is: ‘Let’s see how far you can drive the speedometer.’ Well, we are not an economic experiment in this country.”

Mr Gilmore told the Financial Times he wanted former European Central Bank president Jean-Claude Trichet, the ECB chief at the time of the financial meltdown, called to give evidence at the proposed Oireachtas Banking Inquiry due next year.

“The public are entitled to known what happened,” Mr Gilmore said of Mr Trichet’s role. “There is accountability for all public bodies, whether they are national or European.”

His strong words come at a sensitive time as Ireland prepares to emerge from the €67.5bn bailout programme by the end of this year. Over recent months, the country’s international lenders have become increasingly concerned the Government will ease up on austerity and implement less than the €3.1bn adjustment the troika believes is necessary. The planned adjustment is now believed to be around €2.7bn.

Mr Gilmore said he did not think international markets would question Ireland’s commitment to fiscal discipline if it eased up in 2014. He said Ireland had met all programme commitments and previously said Ireland would meet the 5.1% of GDP target for Budget 2014.

Last night senior Fine Gael sources dismissed his comments as “speaking out of frustration” and said they “didn’t think his comments will make any difference in the run up to the budget”.

Last night, a spokesperson for the Tánaiste said his comments reflected Ireland’s evolving relationship with the troika and said the budgetary adjustment demanded by them was not a runner.