The actual figures prove otherwise.
The January figures show that, after two “tough” budgets, the deficit was actually worse than in January 2009. Compared to then, government expenditure dropped 12% while income dropped 17%. Far from stabilising the situation, the gap has got worse.
Anyway “stabilising” the situation in a €24bn hole is crazy. We must rapidly start climbing out of this hole or the accumulated deficit over a few years will make the cost of NAMA look like small change.
Also the proposed €1.3bn cut in the €20bn public pay bill this year is derisory.
The horrendous truth is that this pay bill must be cut by at least €1 bn per month to have any hope of balancing the books within a few years.
Hopefully my pessimism will be dispelled by the February figures. But if the €24bn gap is not closing we must brace ourselves for a ride that will make the Greeks’ situation – they don’t have NAMA or blanket bank guarantees to contend with – look like a walk in the park.