EU may ask Government to cut spending next month

The_Honeybadger

IRELAND could be asked to make further cuts to government spending next month when the European Commission finalises its assessment of the country’s deficit and debt.Both Spain and Portugal reduced their spending very drastically last week when the EU said their spending was still too high and were not reducing their deficits fast enough. The countries will half their deficits to around 5% by next year.

But Ireland appeared to be ignored by ministers, despite having the highest deficit in the eurozone and a forecast for about 10% next year.

However, economics commissioner Olli Rehn indicated this could soon change as their attention turns to Ireland. "We are certainly looking to Ireland, and while Ireland took early and quite substantial measures to help bring down the spreads, there is a constant need to stay vigilant.

"Ireland will be one of the countries in focus. We are expecting fiscal consolidation," he said following a meeting of EU finance ministers in Brussels yesterday.

"Ireland will be closely followed because of its recent debt dynamics in our comprehensive assessment in June," he added.

Mr Rehn was referring to the forecast and state of play report received from each member state earlier this year which the commission will report on next month.

Ministers also discussed proposals to have the broad outlines of their budgets assessed by the commission and reviewed by ministers from other EU states before being adopted at home.

Several countries expressed concern, but said they believed a way could be found that would not usurp national parliaments but would also allow the commission to issue guidance.

Looks like we could get a slap on the wrists from europe very soon, while we took early steps to curb our deficit, the other peripheral countries are now passing us out in terms of fiscal correction, Lenihans promise that 2010 was the last "very difficult" budget looks very shaky indeed. Does anybody think this may be a stunt to allow the Irish government to make savage cuts, and then point the finger towards Brussels??

http://www.examiner.ie/ireland/eu-may-ask-government-to-cut-spending-next-month-120198.html

thebman

Given FF's record of blaming everything bad that happens on Brussels, I would say that they knew this was coming (as they didn't cut 20 billion last time so knew problem wasn't solved) and choose t osay everything was fine and no more cuts and will now try to play the damn that EU, we can't do anything about it card and hope the electorate fall for it and vote for them next time despite the obvious statement that this is all because of government policy over the past10 years.

ardmacha

The government have already stated that they will cut the deficit for the next few years, probably the EU will be happy with this if they can show a definite plan.

As Davy stockbrokers said
As it stands, we have one element of the Budget package: the €1bn cut in capital spending from €6.5bn to €5.5bn. At least €1bn may come from further current spending reductions viz. the Croke Park Agreement. The other €1bn will come from the following menu: a property tax, water charges or broadening of the tax base (50% of workers pay no income tax whatsoever).

lmimmfn

ardmacha wrote: »

The government have already stated that they will cut the deficit for the next few years, probably the EU will be happy with this if they can show a definite plan.

As Davy stockbrokers said
As it stands, we have one element of the Budget package: the €1bn cut in capital spending from €6.5bn to €5.5bn. At least €1bn may come from further current spending reductions viz. the Croke Park Agreement. The other €1bn will come from the following menu: a property tax, water charges or broadening of the tax base (50% of workers pay no income tax whatsoever).

dont forget property taxes

im actually glad that someone else comes in and forces them to do something

ardmacha

As Davy stockbrokers said
As it stands, we have one element of the Budget package: the €1bn cut in capital spending from €6.5bn to €5.5bn. At least €1bn may come from further current spending reductions viz. the Croke Park Agreement. The other €1bn will come from the following menu: a property tax, water charges or broadening of the tax base (50% of workers pay no income tax whatsoever).

dont forget property taxes

They have already agreed the outline of the plan with the EU. The only fly in the oinment is all of the money squandered on banks.

lmimmfn

ardmacha wrote: »

They have already agreed the outline of the plan with the EU. The only fly in the oinment is all of the money squandered on banks.

sorry i missed that for whatever reason

dan_d

Actually I seem to remember Lenihan saying that the next couple of budgets would be difficult.
Maybe something like this will make the unions wake up and smell the coffee...this is now going above and beyond their cosy little chats with FF.If the EU want to get involved they will, and I doubt there's much that FF or anybody else can do about it.It also looks like they are putting long term plans in place....FF blaming Brussels to win one election might work, but after that, it looks like it's just going to become part of the everyday workings of the Gov. I can't say I'm sorry to see it happen....with any luck the advantages will outweigh the disadvantages. If it means that we (and by we I mean banks, regulators and Gov) are forced to regulate properly and safeguard the economy as opposed to setting self-gain first and foremost, then I for one welcome the EU's involvement.

Count Dooku

ardmacha wrote: »

(50% of workers pay no income tax whatsoever).

They pay enough taxes through VAT and low paid workers will be delighted to know that their taxes will go to pay salaries to overpaid managers in public services who have nothing to do

OMD

Count Dooku wrote: »

They pay enough taxes through VAT and low paid workers will be delighted to know that their taxes will go to pay salaries to overpaid managers in public services who have nothing to do

Quite clearly they do not pay enough taxes. You may not wish to pay more tax, who does but that is not really an argument. If every manager in public service was sacked we would still need more taxes.

By the way, I have mentioned this before, but why do people think the problem is managers and not "ordinary" workers? If you talk to managers you get the opposite answer. Most likely both are to blame.

ardmacha

but why do people think the problem is managers and not "ordinary" workers? If you talk to managers you get the opposite answer.

Perhaps because managers have some influence of the behaviour of "ordinary" workers, but not the other way around.

OMD

ardmacha wrote: »

Perhaps because managers have some influence of the behaviour of "ordinary" workers, but not the other way around.

Or more likely there are much less managers. So there are more ordinary workers to complain. Just because they are loudest does not mean they are correct.

It is human nature. Everyone needs to work harder (except me and people like me), everyone should pay more tax (except me and people like me), Social welfare should be cut (unless I am on social welfare then it shouldn't be touched). Everyone is to blame for the country's situation (except me and people like me).

DidierMc

The EU is the greatest threat to the pay and conditions of Irish workers in the 21st century.

ardmacha

It is clear that processes in the public sector are often inefficient, these are not under the control of the foot soldiers operating them. Whatever the work rate of these individuals the overall organisation remains inefficient if its organisation is inefficient and that is the responsibility of managers. And while there may be less managers than "workers" there are an increasing number of them, with very mixed results.

gurramok

I get a feeling FF are trying to holding off the real pain until 2012, the date of the general election so whoever gets into office will have to dish out the real pain then. A cunning plan.

gandalf

gurramok wrote: »

I get a feeling FF are trying to holding off the real pain until 2012, the date of the general election so whoever gets into office will have to dish out the real pain then. A cunning plan.

That's standard FF operating procedure. Let the opposition make the really painful decisions and they swan back into power in 5 years.

Hopefully the EU's attention on the figures and them protecting the Euro won't allow the Government go down this path and force them to make the painful changes that are needed in the immediate future.

Scofflaw

deadtiger wrote: »

That's standard FF operating procedure. Let the opposition make the really painful decisions and they swan back into power in 5 years.

Hopefully the EU's attention on the figures and them protecting the Euro won't allow the Government go down this path and force them to make the painful changes that are needed in the immediate future.

Actually, Fianna Fáil's standard operating procedure is to make cuts during the early to mid-term when all governments are becoming unpopular anyway, soften up a bit as time goes by, then unveil a giveaway budget just before the election with the promise of yet more spending if they're re-elected, and get back into government every single time.

Fianna Fáil are not just a group of TDs who happen to sit together in the Dáil, but an organisation whose purpose is running the country - they're not interested in spending time out of government, full stop, because they lose out on the quango jobs* and positions of power while they're out, and it takes time to get their supporters and place-men back in afterwards.

cordially,
Scofflaw


*bear in mind that we have a quango sector controlling about €13bn annually, with c. 5000 board members, half of whom are direct Ministerial appointees

Bits_n_Bobs

DidierMc wrote: »

The EU is the greatest threat to the pay and conditions of Irish workers in the 21st century.

Arithmetic is the greatest threat to the pay and conditions of Irish workers, followed by lenders to Ireland who can do arithmetic (AKA the evil 'markets'), followed by the EU, some of who also seem to be able to to arithmetic.

zootroid

DidierMc wrote: »

The EU is the greatest threat to the pay and conditions of Irish workers in the 21st century.

I would have thought workers have enjoyed improved rights since Ireland joined the EU. The fact that we now have free movement of labour across the EU being the most obvious example

Count Dooku

OMD wrote: »

Quite clearly they do not pay enough taxes. You may not wish to pay more tax, who does but that is not really an argument.

total taxable income in 2009 was between 68-76 Bn.
Government expenditure was about 54 Bn.
95% flat rate tax for everybody outside of public services should fix country:rolleyes:

dromdrom

Count Dooku wrote: »

total taxable income in 2009 was between 68-76 Bn.
Government expenditure was about 54 Bn.
95% flat rate tax for everybody outside of public services should fix country:rolleyes:

Don't be silly, are you suggesting that the Public sector wage bill should be frozen, you have made absolutely no allowance for productivity linked wage increases,

DidierMc

zootroid wrote: »

I would have thought workers have enjoyed improved rights since Ireland joined the EU. The fact that we now have free movement of labour across the EU being the most obvious example

Actually that's a terrible example. "Free Movement of Labour" is just a euphamism for big business to bring over cheap labour from the east to drive down wages and conditions.

ei.sdraob

DidierMc wrote: »

Actually that's a terrible example. "Free Movement of Labour" is just a euphamism for big business to bring over cheap labour from the east to drive down wages and conditions.

if "Big Business" wanted cheap labour from East the would just move East

like Dell...

anyways carry on

DidierMc

ei.sdraob wrote: »

if "Big Business" wanted cheap labour from East the would just move East

like Dell...

anyways carry on

That's called the free movement of capital. It's more a medium to long term strategy of big business as it takes longer to move industry than labour.

ei.sdraob

DidierMc wrote: »

That's called the free movement of capital. It's more a medium to long term strategy of big business as it takes longer to move industry than labour.

Maybe we should build a big wall to prevent people and capital moving about

it worked out great for East Germany and North Korea :rolleyes:

DidierMc

ei.sdraob wrote: »

Maybe we should build a big wall to prevent people and capital moving about

it worked out great for East Germany and North Korea :rolleyes:

Yes because anyone who doesn't support free trade treaties is obviously a Stalinist:rolleyes:

Talk about a lazy brainless argumnet! Vote Yes for jobs eh?

dromdrom

DidierMc wrote: »

Yes because anyone who doesn't support free trade treaties is obviously a Stalinist:rolleyes:

Talk about a lazy brainless argumnet! Vote Yes for jobs eh?

No they are most likely a protectionist, looking to protect there own little patch to the detriment of everyone else.

DidierMc

dromdrom wrote: »

No they are most likely a protectionist, looking to protect there own little patch to the detriment of everyone else.

So you think Ireland will benifit from "free trade" over the next decade?

dromdrom

DidierMc wrote: »

So you think Ireland will benifit from "free trade" over the next decade?

Small open economy who exports most of our good and services, dunno really maybe DeVelara had it right with the whole closed shop thing, and that joining of the E.U (you know the one with that nasty free trade and open markets thing) jury is still out whether that has been of any benefit to us..

DidierMc

dromdrom wrote: »

Small open economy who exports most of our good and services, dunno really maybe DeVelara had it right with the whole closed shop thing, and that joining of the E.U (you know the one with that nasty free trade and open markets thing) jury is still out whether that has been of any benefit to us..

Ireland actually exports very little goods and services. We do however manufacture products for American corporations that they export. The profits don't stay in Ireland though. Most of this manufacturing will also be relocated to the east in the coming years.

dromdrom

DidierMc wrote: »

Ireland actually exports very little goods and services. We do however manufacture products for American corporations that they export. The profits don't stay in Ireland though. Most of this manufacturing will also be relocated to the east in the coming years.

Really any chance you might produce some proof to substantiate your theory on the relocation of the American Investment from Ireland in the 'coming years' (although I did hear a rumour that Microsoft and Google were considering relocating to Lithuania). Also any outlines on your plans for how a nation of 4 million people can operate as a closed economy would also be brilliant. As someone who works for a successful multinational in Ireland I can assure you that end ownership does not make a jot of difference, if the goods are manufactured in Ireland , made by Irish people and shipped through Irish ports then you can count them as Irish exports.

DidierMc

dromdrom wrote: »

Really any chance you might produce some proof to substantiate your theory on the relocation of the American Investment from Ireland in the 'coming years' (although I did hear a rumour that Microsoft and Google were considering relocating to Lithuania). Also any outlines on your plans for how a nation of 4 million people can operate as a closed economy would also be brilliant. As someone who works for a successful multinational in Ireland I can assure you that end ownership does not make a jot of difference, if the goods are manufactured in Ireland , made by Irish people and shipped through Irish ports then you can count them as Irish exports.

Actually whether the profits stay in the Irish economy or not is a very big issue. And you are deluding yourself if you think foreign capital based in Ireland will not try to move east to exploit the low wages there. I'm not calling for a closed economy but rather changing the nature of how we trade. We need to invest in indigenous companies instead of bending over to accomodate transnationals. We also need to take control of our resourses like fish and energy. The Irish territorial waters are massive and we should have a state company investing in this. Ireland could be a big exporter of gas and fish if we take control of these resources instead of constantly giving them away.

dromdrom

DidierMc wrote: »

Actually whether the profits stay in the Irish economy or not is a very big issue. And you are deluding yourself if you think foreign capital based in Ireland will not try to move east to exploit the low wages there. I'm not calling for a closed economy but rather changing the nature of how we trade. We need to invest in indigenous companies instead of bending over to accomodate transnationals. We also need to take control of our resourses like fish and energy. The Irish territorial waters are massive and we should have a state company investing in this. Ireland could be a big exporter of gas and fish if we take control of these resources instead of constantly giving them away.

And when you say we need to invest in indigenous companies whom are these companies going to trade with?

DidierMc

dromdrom wrote: »

And when you say we need to invest in indigenous companies whom are these companies going to trade with?

If they are making products that people need and want then I'm sure they can trade with lots of people. You have a strange idea of what trade is!

dromdrom

DidierMc wrote: »

If they are making products that people need and want then I'm sure they can trade with lots of people. You have a strange idea of what trade is!

So perhaps these 'national powerhouses' may be able to sell into other countries in some sort of reciprocal agreement (coz I'd imagine nobody would want to trade with us if we did not also allow there companies to trade here would you not agree? ) perhaps we could put a name on this practice which would allow companies in both jurisdictions to trade freely with each other, any ideas?

dromdrom

DidierMc wrote: »

So you think Ireland will benifit from "free trade" over the next decade?

DidierMc

dromdrom wrote: »

So perhaps these 'national powerhouses' may be able to sell into other countries in some sort of reciprocal agreement (coz I'd imagine nobody would want to trade with us if we did not also allow there companies to trade here would you not agree? ) perhaps we could put a name on this practice which would allow companies in both jurisdictions to trade freely with each other, any ideas?

Well I'm talking about fair trade rather than transnationals trying to drive down wages to maximise profits like you support. I do not support Ireland importing potatoes, apples and beef. I do not support profitable companies leaving Ireland just because they can make even more in a low wage economy. And while I fully support the rights of asylum seekers and refugees to come here I think economic migrants should be regulated. Rather than bringing cheap labour over here that drives down wages and conditions, countries in the east should be helped to develop their own indigenous manufacturing and business. "Free" movement of labour is not good for people in Poland either. Its spilts up families, divides their communities and has a brain drain effect on them. They don't want to move to Ireland to work in McDonalds for minimum wage but their right wing governments do nothing to create sustainable jobs where they are.

dromdrom

DidierMc wrote: »

Well I'm talking about fair trade rather than transnationals trying to drive down wages to maximise profits like you support. I do not support Ireland importing potatoes, apples and beef. I do not support profitable companies leaving Ireland just because they can make even more in a low wage economy. And while I fully support the rights of asylum seekers and refugees to come here I think economic migrants should be regulated. Rather than bringing cheap labour over here that drives down wages and conditions, countries in the east should be helped to develop their own indigenous manufacting and business. "Free" movement of labour is not good for people in Poland either. Its spilts up families, divides their communities and has a brain drain effect on them. They don't want to move to Ireland to work in McDonalds for minimum wage but their right wing governments do nothing to create sustainable jobs where they are.

So does economic growth occur in your world of fair trade? Do you think that perhaps the state might even push people in the general direction of the correct industries that they should work in and also perhaps prevent labour mobility so that vital strategic industries can prosper, perhaps we might go one step further and promote these 'national champions' over private enterprise, hell lets just do away with private enterprise, the state is the power best suited to regulating our lives and managing how the economy works. I think you'll find that if you put that to any of the Eastern European migrants over the age of 40 coming to this country you'll get a response.

DidierMc

dromdrom wrote: »

So does economic growth occur in your world of fair trade? Do you think that perhaps the state might even push people in the general direction of the correct industries that they should work in and also perhaps prevent labour mobility so that vital strategic industries can prosper, perhaps we might go one step further and promote these 'national champions' over private enterprise, hell lets just do away with private enterprise, the state is the power best suited to regulating our lives and managing how the economy works. I think you'll find that if you put that to any of the Eastern European migrants over the age of 40 coming to this country you'll get a response.

If I put it to any eastern european economic migrants? Well surely if the introduction of "free" trade was so fantastic for their country then they wouldn't have emigrated!

dromdrom

DidierMc wrote: »

If I put it to any eastern european economic migrants? Well surely if the introduction of "free" trade was so fantastic for their country then they wouldn't have emigrated!

In fact the absence of free trade and the free market is probably a more important reason for the state of Poland than vice versa, they have had there experiment with a state controlled economy and I think the overwhelming reaction from that part of the world is that it didn't go down to well. So what you are saying is that we return to a fair trade trade society, where we do not look to liberalise markets and look to and try and to remove the vagaries of competition and the necessity for efficiency, we have also had a very long history of that right up until the mid nineties, thank god for labour mobility which allowed Irish people to go and seek a better life for themselves in welcoming countries which espouse the virtues of free trade (U.K , USA , Australia). What also of the many hundreds of millions of people that have managed to pull them selves out of poverty through the onset of increased free trade, seems pretty fair to me don't you think.

rumour

mickeyk wrote: »

Looks like we could get a slap on the wrists from europe very soon, while we took early steps to curb our deficit, the other peripheral countries are now passing us out in terms of fiscal correction, Lenihans promise that 2010 was the last "very difficult" budget looks very shaky indeed. Does anybody think this may be a stunt to allow the Irish government to make savage cuts, and then point the finger towards Brussels??

http://www.examiner.ie/ireland/eu-may-ask-government-to-cut-spending-next-month-120198.html

I've read through this thread, what happens if we say no? I thought that would be a good place to start. Seems we are not really allowed say that to anyone anymore.

dromdrom

rumour wrote: »

I've read through this thread, what happens if we say no? I thought that would be a good place to start. Seems we are not really allowed say that to anyone anymore.

Then the very nice people who are lending us the money and providing an implicit backstop to our public debt would also say no. Then we would have to fund current spending from current revenue, would love to see that Croke Park agreement

rumour

There would be an initial shock, but would we not be in the same position as iceland, who are now borrowing money cheaper than we are. (sort of makes Merkel right about speculation).

That said at some point this mess has to be cleaned up, all this crap about soft landings, green shoots of recovery is all nonsense, we are undergoing death by a thousand cuts, excuse the pun. I think we should tell the others to bugger off and sort our affairs out. This is a really hard choice to make it takes courage and integrity.

The end game is the same either way, we will be worse off, but if take the initiative then we will not be beholden to the ECB forever. We would have a modicum of control over our future destiny.

dunsandin

Its funny how when we signed up to Lisbon(I voted no) we were promised that we would retain full autonomy and independent budgetary control. The "big change" has taken less time than I thought. Prepare for central control, dressed up as "neccessary help to control our budget deficit". It is a Eurocrats wet dream come true. In order to "assist" all the poor fools in the PIGS nations, central auditors will have to "audit" our budgets. Retaining our independence my a55. Predictable, but deeply saddening. We are worse off than in the '80's, because in the '80's we had a future and we had our own hand on the tiller. We are now at the mercy of Europe, its capital and its guidance. Jesus wept. Thank you Mr Brian Cowen, you true patriot, and all of your ilk.

dromdrom

dunsandin wrote: »

Its funny how when we signed up to Lisbon(I voted no) we were promised that we would retain full autonomy and independent budgetary control. The "big change" has taken less time than I thought. Prepare for central control, dressed up as "neccessary help to control our budget deficit". It is a Eurocrats wet dream come true. In order to "assist" all the poor fools in the PIGS nations, central auditors will have to "audit" our budgets. Retaining our independence my a55. Predictable, but deeply saddening. We are worse off than in the '80's, because in the '80's we had a future and we had our own hand on the tiller. We are now at the mercy of Europe, its capital and its guidance. Jesus wept. Thank you Mr Brian Cowen, you true patriot, and all of your ilk.

These same 'Eurocrats' are the one keeping us afloat, being petulant with them wouldn't be a great idea, kinda like insulting your bank manager as you go cap in hand. Our 'budet deficit' is not the result of some Brussells conspiracy it is the result of our own mismanagement , quite right that someone should seek to impose some moderation (thanks be to god because look at the job we did) as they agree to bail us out.

thebman

dromdrom wrote: »

These same 'Eurocrats' are the one keeping us afloat, being petulant with them wouldn't be a great idea, kinda like insulting your bank manager as you go cap in hand. Our 'budet deficit' is not the result of some Brussells conspiracy it is the result of our own mismanagement , quite right that someone should seek to impose some moderation (thanks be to god because look at the job we did) as they agree to bail us out.

Least we forget we are voluntarily signing up to the EU controls.

It is not being forced on it nor was it part of Lisbon.

There are other options. Of course they are even less desirable options IMO.

When you dig a hole, you gotta stop digging at some point and the PIIG's have dug one hell of a hole.

DidierMc

thebman wrote: »

Least we forget we are voluntarily signing up to the EU controls.

It is not being forced on it nor was it part of Lisbon.

There are other options. Of course they are even less desirable options IMO.

When you dig a hole, you gotta stop digging at some point and the PIIG's have dug one hell of a hole.

Voluntarily? But our No votes are never respected, how can you possibly call it voluntarily?

thebman

DidierMc wrote: »

Voluntarily? But our No votes are never respected, how can you possibly call it voluntarily?

Probably because this had nothing to do with fooking lisbon and our no vote was respected, otherwise they would have gone ahead despite it.

People could have voted no again, they didn't, deal with it.

DidierMc

thebman wrote: »

Probably because this had nothing to do with fooking lisbon and our no vote was respected, otherwise they would have gone ahead despite it.

People could have voted no again, they didn't, deal with it.

How can you possibly say the No vote was respected? The establishment planned to have another referendum within hours of the No vote.

whatisayis

"Believes that real economic governance implies to give to the Commission a proper and stronger responsibility of management enabling it to use existing tools and tools newly provided for by the Lisbon Treaty such as Articles 121, 122, 136, 172, 173 and 194 which confer to the Commission the task of coordinating reform plans, actions as well as establishing a common strategy;"

http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=B7-2010-0269&language=EN

Nothing to do with the Lisbon Treaty? Even the EU Parliament don't believe that.

dunsandin

dromdrom wrote: »

These same 'Eurocrats' are the one keeping us afloat, being petulant with them wouldn't be a great idea, kinda like insulting your bank manager as you go cap in hand. Our 'budet deficit' is not the result of some Brussells conspiracy it is the result of our own mismanagement , quite right that someone should seek to impose some moderation (thanks be to god because look at the job we did) as they agree to bail us out.

##


And we all know where our past deference to the almighty and wise"Bank managers" got us. Maybe if there was a little less deference to percieved "Higher powers" within the Irish psyche we would all be better off. We are very quick to assume someone else has our best interests at heart. The opposite is often the case.

dromdrom

dunsandin wrote: »

##


And we all know where our past deference to the almighty and wise"Bank managers" got us. Maybe if there was a little less deference to percieved "Higher powers" within the Irish psyche we would all be better off. We are very quick to assume someone else has our best interests at heart. The opposite is often the case.

Not a deference to anybody really, not even saying that they have our best interests at heart, just facing the reality that we are borrowing money to stay afloat , kinda silly to annoy the people that are allowing us to do so, I mean sure we could revolt and stick it to the man but any suggestions as to what we would do once we can't borrow on international markets?