Central Bank insists austerity is only real option
Fiona Muldoon tells MacGill summer school Government must get State’s finances in order
Fiona Muldoon of the Central Bank who argued the Government has no realistic option but to continue its policy of austerity. Photograph: Cyril Byrne/The Irish Times
A senior Central Bank official today said the Government has no realistic option but to continue its policy of austerity.
Fiona Muldoon, Central Bank director of credit institutions and insurance supervision, insisted there is no alternative to paying down our debts and getting the State’s finances in order.
“The real choices to be made are whether some areas should be cut more than others or in how much we cut and whether we get value for money in what we spend,” she told the final day of the MacGill summer school in Glenties, Co Donegal. “That is a matter for democratically elected government and its electorate.”
During a session on restoring confidence in the financial sector, Ms Muldoon said a stable credit system was vital. “It is too easy to criticise the regulatory system, but much harder to put forward positive proposals which would oversee Ireland’s financial services sector,” she said.
She said she looked to a future where those in the financial sector would look to regulation as sensible parameters rather than as a contest between those in the sector and those attempting to govern it.
Meanwhile Siptu president Jack O’Connor warned austerity is a form of violence against the people. “This is a brutal recalibration of economies to suit the euro rather than the other way around,” he said.
“It is the Americanisation of Europe – even the Ryanair-isation of Europe,” the union leader added.
“Austerity is never actually societally neutral,” he warned. “It is a violence perpetrated against working people and those who depend most on public services.
“Until now at least, it has been administered through a deadly concoction of fiscal retrenchment accompanied by Labour Market Reform – a euphemism for the most sustained attack on the gains made by organised workers since the second World War.”
In a passionate speech against current Government policy, he added: “Unless there is a change of course entailing some sort of write off or mutualisation of debt, accompanied by a major fiscal initiative to facilitate the generation of jobs and growth, thus enabling countries to manage and reduce their debt to GDP ratio, it will end in the demise of the euro or the collapse of the democratic system itself, in some countries at least, or both.”
It may not happen today or tomorrow, he warned. “But more likely following a prolonged period of stagnation and anaemic growth interspaced by recurring false dawns, which will always be heralded as ‘the end of the recession’. Indeed we may be entering such a false dawn now,” he said.
“I don’t do optimism. I do realism which if often confused with pessimism,” he said, claiming Ireland’s “comfortable voices” are blackmailing the Government to screw the ordinary man.
“Social Democracy is committing political suicide as its attempt to ameliorate the impact is mistakenly perceived as collaboration, no less here than anywhere else,” he added. “We do need assistance on the bank recapitalisation, otherwise we are condemned to bear an impossible burden for more than a generation in a low growth, low inflation environment, if we do not succumb to it altogether.