Bail-out bosses warn of shared pain

The Republic of Ireland’s bail-out bosses have warned everyone must take their share of pain if the country is to make a recovery.

In their latest progress report, the EU, IMF and ECB troika shone the spotlight on the “sheltered” legal, medical and pharmacy industries for still being too expensive.

They also warned about a “lost generation” in youth unemployment unless the Government and the international bodies put heads together to create jobs.

Istvan Szekely, EC director of economic and financial affairs, said: “We have to be honest – Ireland is not yet out of the woods.”

But he said real progress was being made and all targets under the rescue deal had been met.

However, a lot of sacrifice from everybody in Ireland was needed to remain on track to pull itself out of the economic crisis, he added.

Mr Szekely said exports and manufacturing were performing “outstandingly” well and driving growth but he insisted medical, pharmacy and legal services needed to slash their prices.

Giving the example of Brussels, where he is based, Mr Szekely said he pays half of what Irish people are being forced to shell out to see a GP.

Legal services in Ireland were among the most expensive in the world and needed to be brought into the 21st century, he added. “There’s a long way to go here,” he said.

Mr Szekely said the troika wanted to make the consumer king in Ireland.

Reduced costs for essential services would help smaller businesses and strengthen the buying power of everybody, he said.

With unemployment unacceptably high, he said they needed to come back and put heads together with the government to avert a potential “lost generation” of younger people who are unable to find work.

Finance Minister Michael Noonan said the Government was working with the troika on the possibility of using money from the sale of State assets – like part of ESB – to fund job creation programmes.

IMF deputy director Ajai Chopra said emigration was one of the key homegrown threats to recovery.

“There are a lot of very positive things going on in Ireland but I don’t think we should lose sight of the risks,” he said.

“But Ireland is doing the right thing in terms of what it can control.”

Mr Chopra praised the government for taking a “sensible approach” to resolving the mortgage debt crisis but warned about outside factors like a dip in demand for exports and the impact of the eurozone’s difficulties on the cost of borrowing.

The troika have been in Dublin since last week to review progress on the commitments made as part of Ireland’s rescue package. The country’s ability to continue to draw down funding from the international bodies depends on targets being met.

The government has published a number of proposed laws, including legislation targeting the legal and medical professions, as part of the deal over recent weeks.

Mr Noonan said targets on overhauling the banking industry had also been met.

The government was working on expected savings through tax increases and public spending cuts of €3.6bn in the December Budget, but tax figures due next month would determine if they need to make more, he added.