The Government’s declared intention of taking up to €4 billion out of the economy in the autumn poses a serious threat to public services, leading trade unionist David Begg has told the MacGill Summer School.
The general secretary of the Irish Congress of Trade Unions said it had been “well-telegraphed” the spending review in the autumn will result in cuts of between €3.6 billion and €4 billion.
“This will compound the deflationary impact of the €20.6 billion that has been taken out of the economy in three budgets since 2008,” he said. “It is difficult to see how this will not have a serious debilitating effect on public services because at this point this is cutting into muscle."
This level of retrenchment would be “profoundly mistaken” in economic terms. It is true that exports are performing very well, and there will be a balance of payments surplus this year. But the jobs are in the domestic sector of the economy.”
The prospect was that unemployment would remain at over 14 per cent, he said, adding: “The price of austerity potentially is a lost generation of Irish people.”
Austerity was not working, Mr Begg said. “There is no growth in the economy and without growth to do some of the heavy lifting of adjustment it is not possible to generate the level of primary surplus necessary to allow for debt repayment," told his audience. "Markets know this very well which is why Moody’s downgraded Irish debt to junk status."