Monday, March 7, 2011

Ireland - Voter betrayal: FG/Labour to ditch pledges on economy

From the


Sunday March 06 2011

The Fine Gael/Labour coalition Government is to implement in detail the outgoing Government's four-year austerity plan as approved by the EU-IMF, the Sunday Independent can reveal.

In what will amount to the most barefaced breach of election promises ever perpetrated by an incoming Government, the coalition partners' programme for government will cause uproar when it is published today.

While an attempt will be made to dress up the programme as a new plan by a new Government, when it is analysed it will be seen for what it is -- the continuation of the economic policies of Fianna Fail and the Greens, virtually in minute detail, as laid down by the EU-IMF.

If anything, Fine Gael will be seen to have capitulated more as it is handing over responsibility for reform of the public sector to Labour, whose core support is drawn from the public sector.

The programme envisages no more than 22,000 voluntary redundancies in the public sector, a long way short of Fine Gael's election promise to reduce the numbers employed by 30,000.

Fine Gael is expected to defend this U-turn by stating that 2,500 voluntary redundancies have already taken place in the public sector since January 2010.

However, the Fine Gael decision to hand reform of the public sector to Labour will provoke fury among many Fine Gael TDs, and cause uproar among the huge numbers who voted for Fine Gael.

Furthermore, it reduces the Government's chances of re-negotiating the EU-IMF bailout since our public spending excess is seen as a chronic problem in Europe.

The new Government will place heavy emphasis on its intention to renegotiate the bailout plan, as imposed on the outgoing Government, but the possibility of such a renegotiation is at least two, maybe three years away.

The omens are not good in this regard as the incoming Taoiseach, Enda Kenny, has already prepared the ground to pull back from his demand for "haircuts" on senior bank debt, saying other ways must be found to cut the cost of Ireland's bank bailout if losses are not imposed on bondholders.

"There is no way we are going to survive as a country unless we successfully renegotiate the EU-IMF deal," a senior Fine Gael source, familiar with the negotiations to form a Government, told the Sunday Independent yesterday.

The new Government will cite briefings on the dire state of the economy, and the banks to explain its decision to slip into the straitjacket imposed by the EU-IMF, just vacated by Fianna Fail and the Greens.

Yesterday, however, a well-placed Fine Gael source did not even attempt to disguise the fact that the new programme for government represents a rip-off of the outgoing Government's four-year plan as signed off on by the EU-IMF.

"Yes, we are going to have to stick with the four-year plan, at least for two or three years, and maybe even go further and deeper than the austerity measures envisaged in that plan," he said. "There is no getting away from that. I cannot deny it.

"The country is banjaxed, worse than we ever imagined. We have no choice." on

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