Economy in crisis - Realism and courage are needed now

IT is not coincidental that, over the last two days, Taoiseach Brian Cowen and three senior ministers outlined the threat posed to our independence by borrowing more than €400 million a week.

The Lisbon victory and the Green Party vote supporting the coalition have offered a degree of stability that, thankfully, facilitates straight talking.

We can expect these comments to be repeatedly endorsed before the December 9 budget.

First, Finance Minister Brian Lenihan speaking in Dublin on Thursday, was as plain-speaking as could be announcing that cabinet ministers and senior civil servants would have to lead by example by taking “substantial” pay cuts. This was reiterated by Taoiseach Brian Cowen in Clonmel yesterday afternoon.

Mr Lenihan warned that our situation was so severe that unless radical action was taken the unfolding situation would make the €5.3bn cuts proposed by the McCarthy Report look like a “picnic”. It is worth repeating too that he pointed out that the top 4% of earners pay 48% of income tax and that if borrowing continued unchecked then €2 out of every €3 of income tax would go to service a national debt of €160bn by 2013.

You do not have to be Ben Bernanke or JP McManus to work out that those positions would be catastrophic.

Mr Lenihan’s comments were supported, within hours, by Green leader and Environment Minister John Gormley, who said Government will introduce cuts in every single department.

Hours later Health Minister Mary Harney echoed these sentiments warning that if we did not “make the right decisions” the International Monetary Fund will intervene. In those circumstances she predicted cuts of up to 30% in every area of Government spending.

Effectively, that will mean Ireland will be a fiefdom of international bankers because we refused, despite all the warnings, to stop spending far, far more than we earn.

We will be consigned to the stagnant backwaters of the world economy reserved for irredeemable basket cases and dictatorships in the hands of the insane. We will have little or no control over our affairs and no discretion at all in how our tax revenues are spent.

And it will be our own fault.

At this point our choices are limited. We can decide to accept a programme that may or may not restore some sort of balance to our finances or we can destroy each other fighting to protect imagined but unaffordable rights and privileges.

We can give into fear and worry, both entirely justifiable, and try to defend sectional interests to the ultimate disadvantage of us all. We can lodge insane pay demands or form alliances with macho but meaningless names to protect “entitlements”.

We can allow ourselves be diverted and point out that those making these dire predictions are, largely, the very politicians who led us up this calamitous garden path.

However, we must assume that the substantial pay cuts for ministers and senior civil servants are just the opening salvo in a process that will permeate right through this society — with no exceptions — and hopefully begin to rebuild the dream of Irish independence.

The day of reckoning is at hand and let’s hope we can deal with it without destroying ourselves and our future.