The Government has been urged to show “nerves of steel” and stand up to its European debt masters by rejecting their austerity demands.
As budget tensions between the coalition escalate – with Fine Gael insisting Ireland must continue to exceed its fiscal targets while Labour calls for a softer approach – trade union Siptu claimed more austerity would be tyrannical.
General president Jack O’Connor said demands from European officials for €3.1bn of tax hikes and spending cuts in Budget 2014 are not necessary to return the country to growth.
“It is one thing having to inflict misery because it is the least worst of the available options, but going along with it when it is unnecessary is not only economically unsustainable but worse, it is morally indefensible,” Mr O’Connor said.
The trade union leader described austerity as “a violence perpetrated against working people”.
He said breathing space afforded by the €1bn of savings from the promissory note deal would enable the Government to reduce the planned €3.1bn adjustment.
Money shored up from the local property tax, which came into force on July 1, and further savings made in the public sector pay purse through the Haddington Road Agreement could also be used to ease the Budget, Mr O’Connor said.
His claims, made during a speech at MacGill Summer School in Glenties, Co Donegal, clashed directly with those of Department of Finance secretary general John Moran, who insisted the Government must press ahead.
Mr Moran said it was wrong to mock Ireland as a meek and subservient “poster boy for Europe”.
He said the Government has no choice but to deliver a tough Budget and that he believes the Irish people have the determination to see it through.
“The actions undertaken have been and continue to be for the economic and social betterment of Ireland,” Mr Moran said.
“It is imperative therefore that we remain committed to returning Ireland to a sound fiscal footing, that our better judgement is not clouded by wishful thinking and that the efforts up to now are now undone by complacency.”
This is set against a backdrop of conflict over recent weeks regarding the Government’s plans for Budget 2014.
The Troika – made up of the European Central Bank, the International Monetary Fund and the European Commission – have warned the Government must make €3.1bn of savings.
Tánaiste Eamon Gilmore rejected these calls last week, claiming the Government had not agreed to a monetary target, but rather a percentage target – to reduce the country’s deficit to 5.1% of gross domestic product (GDP) in 2014 and to 3% by 2015.
Taoiseach Enda Kenny has also insisted these targets would be reached, but said details of the monetary adjustment would not emerge until the weeks ahead of the budget on October 15.
Meanwhile, Fine Gael and Labour TDs have been at loggerheads over plans for the Budget.
Eight Fine Gael backbenchers set out their stall in a letter to the Irish Times earlier this week, saying the Government should stick to the Troika’s targets and should also borrow for a stimulus programme.
In a letter of rebuttal, a group of five Labour backbenchers branded the Fine Gael TDs “austerity junkies”, insisting the Government should make the necessary savings and not a cent more.