‘We cannot deviate from austerity’

The Coalition should not deviate from the €2bn adjustment planned for next year despite a voter backlash against austerity in last week’s elections, according to the chair of the budgetary watchdog, the Fiscal Advisory Council.

However, Professor John McHale accepted there will be “great difficulty” politically in proceeding with this scale of cuts without a “greater unravelling of support for adjustment policies”.

Speaking at a conference examining the economic, political and social effects of austerity at the University of Limerick, he said Ireland is still in “quite a fragile situation” and the policy of a further €2bn of spending cuts and tax increases “should be pursued”.