The economy - Realism is a first step to recovery

THIS morning’s survey on our attitudes to the recession shows a reassuring combination of realism, possibility and potential for optimism.

One of the frontline findings is that just one in four people belive that the recession will have “little or no impact on them personally”, and that things will trundle along just as they have done for the past decade. Most suggested that the recession would have little or no impact on domestic spending, though some expected to take fewer foreign holidays.

A very optimistic reading of that is that 25% of us managed to squirrel away enough during the boom times to insulate ourselves from today’s changed circumstances. Either that or they are in denial.

Continuing this theme of contentment, more than a third of those surveyed believe the recession will have little or no impact on their “way of life”, with almost a third of people believing it will have little or no impact on their monthly spending.

Half of the full-time workers asked said they believed that the recession would have little or no impact on job security. However, one in five feared a severe impact on jobs. Undoubtedly a position already accepted by the tens of thousands of workers who have lost their jobs in the construction sector or in allied businesses.

A plainer reading of those figures — one in four believing that they are immune — suggests that 75% of us realise that things have changed.

This reading looks to the future and indicates that we have taken the most important step towards resolving our difficulties: we have accepted that we have a problem and that we will have to change our habits, albeit in a minor way, according to this Red C survey. This is a tall but not impossible order, especially in the light of yesterday’s greatly increased exchequer deficit, up to €8.4 billion this year from €2.87bn this time last year.

Add to that the Organisation for Economic Co-operation and Development (OECD) report that Europe’s economy is slowing faster than was expected. The US economy, where the recession began, did better in the second quarter and the OECD raised its annual forecast for US growth from 1.2% to 1.8%, a sliver of optimism that compliments some of the Red C poll findings. However, the OECD cut a 1.7% prediction for the eurozone to 1.3% and to 1.2% from 1.7% for Japan.

Later this week Taoiseach Brian Cowen is expected to initiate a do-or-die resumption of the national pay talks and if both sides show the pragmatism recorded in the Red C poll there is every prospect of success.

Employers must know that workers, especially the lower paid, cannot cope with inflation without a pay rise. Employees must also realise employers cannot provide pay rises that negate the impact of the recession.

If the pain is spread around then the realism shown in the poll may soon turn to optimism. If not, then we have only ourselves to blame.