Troika is dissatisfied with scale of Croke Park savings
SERIOUS MISGIVINGS have emerged about the scale of savings being achieved under the Croke Park agreement in advance of the latest EU-IMF-ECB troika visit to assess progress under the bailout.
It is understood that experts from the European Union, International Monetary Fund and European Central Bank are becoming increasingly frustrated with how the Coalition is implementing the bailout by cutting services to the public rather than tackling vested interests in the public service and professions.
While the troika is satisfied that overall targets for deficit reduction are being met, there is concern at the way they are being achieved, according to sources involved in the process. It is also understood that there is concern about the budget overruns in health.
Signs of growing discontent have also emerged on the Fine Gael backbenches, with several TDs becoming increasing critical of the Government’s approach to making savings in the public service pay bill.
Confirmation by chairman of the implementation body PJ Fitzpatrick to the Public Accounts Committee (PAC) that increments and allowances are not part of the Croke Park deal has aggravated Fine Gael TDs.
The disclosure that Government departments are calculating savings made through early retirement by adding 80 per cent to salary savings on the basis of non-pay economies has also created problems.
One department, Agriculture, did not claim savings in line with the norm applied by other departments on the basis that they were “excessive, relative to actual costs”.
Minister for Agriculture Simon Coveney confirmed yesterday that his department did not claim these extra savings, saying it was “simply being accurate” by not adding massive non-pay savings. He said that while the standard calculation method for estimating savings for departing public servants involved adding a substantial non-pay element, that system had not been applied in Agriculture because those savings did not apply immediately.
“I’m not in the business of giving inaccurate figures to the Department of Public Expenditure [and Reform] and that is why my department is being run in a business-like manner and we give actual savings as they are made.”
In a report to the PAC last week Mr Fitzpatrick said that over the first two years of the Croke Park agreement savings of €810 million had been made in the pay bill, along with €678 million in non-pay savings.
Several TDs voiced concern at the PAC as to the validity of calculation about the non-pay savings.
One, Fine Gael Dublin South East TD Eoghan Murphy, queried the methodology used to calculate the savings and said it called the entire deal into question.
Mr Murphy also pointed to the admission at the PAC that allowances and increments were not covered by the agreement and suggested that a more critical analysis was needed at the way it was operating.
Last night Tánaiste Eamon Gilmore defended the Croke Park agreement and the savings made under it. He insisted that “the sums add up”.
He also dismissed reports that the Government wanted to extend the deadline of 2015 for reducing the exchequer deficit to 3 per cent of gross domestic product. He said that the people of this State wanted to see when and where the end was and they needed to get it over with.
Mr Gilmore told RTÉ’s The Week in Politics that there would be no second bailout. And he predicted that the Republic would be out of the troika programme by the end of 2013.
He was also confident the Republic would get “a very good deal” on the banking debt and said discussions were continuing with the ECB and other EU governments.
However, general secretary of the Irish Congress of Trade Unions David Begg questioned the feasibility of reducing the deficit to 3 per cent by 2015 and said that a later date was now necessary. Mr Begg said the absence of growth meant that the target could not be reached by the deadline, which he suggested should be extended until 2017.
He was highly critical of the troika, describing its members as “neo-liberal zealots”. He said that he would expect to see them “sitting in sackcloth and ashes” asking for repentance for what they had done to this country.