Leaked report rings warning bells over GDP

The Government has asked the European Commission to ensure confidential documents that go to member states remain confidential, following the leaking of a report on Ireland’s austerity programme.

The commission said it deplored the leaking of the document by members of the German parliament and it will make a formal complaint. They noted this was the second time in four months politicians in Berlin have broken confidence by releasing details to the media.

Taoiseach Enda Kenny said, “these things are unhelpful, but sometimes they are overplayed”.

The report, drawn up by commission members of the troika, noted Ireland’s positive achievements but rang warning bells.

The report said that risks to the ultimate success of the bailout programme remain and improved market sentiment towards Ireland is fragile and could evaporate if conditions in export markets or the eurozone deteriorated, and delay a return to the markets.

If growth slowed a lot or tax revenue dropped later in the year Ireland might need to make bigger cuts to keep to the budget deficit of no more than 8.6% of GDP this year.

Commenting on the possible need for more cuts, Michael Noonan said: “All the authorities have agreed that we will achieve the 8.6% as our fiscal target, so it doesn’t arise that there will be further fiscal tightening.”

Job creation policy is weak, especially in relation to European standards and especially because of the big number of long-term unemployed.

Following the report, the EU has agreed to pay out €5.8bn in the latest loan instalment on top of the €3.2bn agreed by the IMF earlier this week.

There will also be €700m from Britain, Sweden and Denmark, and negotiations with the latter two are being finalised.