Indebted states must take tough fiscal action to satisfy markets, says Cowen

 

TAOISEACH BRIAN Cowen has warned global markets will not be satisfied by offers of EU financial support unless indebted states take tough domestic action to get their own public finances in order.

In a question and answer session with business leaders in Dublin yesterday, Mr Cowen said Greece needed to follow his Government’s example and cut debt.

“We have had to take dramatic decisions in relation to our fiscal difficulties. I believe that Ireland has been showing the flexibility to adjust quickly – even more than other euro zone economies,” said Mr Cowen in a speech to the Trilateral Commission, a high level group of business, academic and political leaders meeting at a hotel in Dublin.

Asked by former Federal Reserve chairman and economist Paul Volcker – a key adviser to US president Barack Obama – about the difficulties facing the euro zone, Mr Cowen said EU solidarity could not restore confidence alone. He said the most important lesson learned during the economic crisis was the need to act quickly to regain credibility.

He said the Government’s swift action had been acknowledged by international bodies such as the European Commission and this was reflected in the bond markets.

“We have made major strides in getting our house in order as quickly as possible.”

Mr Cowen said it had been very difficult, in the face of understandable anger and worry, to communicate with the public about what were very complex issues. He said this needed to be addressed on an ongoing basis, but insisted the Government would follow through with its planned cuts.

“We have also made clear our absolute determination to take further measures in the coming years to complete the fiscal adjustment required.”

Mr Cowen, who spoke shortly before flying out to attend an EU meeting in Brussels, said there was no huge appetite to push for changes to the EU treaties to amend euro zone rules. Such treaty changes “would be easier said than done”. But he said he could not prejudge discussions on the issue by leaders at EU level.

Mr Cowen also made a sales pitch for the Republic as a location for foreign direct investment, saying the county was an an “enterprise-friendly environment” and had an existing base of multinationals, a pool of talented graduates and a growing international reputation for innovation.

He said Ireland had come through a very difficult period, but had now turned the corner. The Government had a clear strategy and the economy was forecast to grow at double the euro area average in 2011.

THE TRILATERAL COMMISSION A BODY THAT VALUES PRIVACY   

The Trilateral Commission is a private organisation founded in 1973 by David Rockefeller, the current patriarch of the Rockefeller dynasty. It aims to foster closer co-operation between the US, Japan and Europe and its recent focus has been to debate the financial crisis. It held its plenary session in Dublin, which was chaired yesterday by Prof Richard Conroy and Ireland’s former EU commissioner Peter Sutherland.

The influential membership of the commission and the fact its meetings are held in secret has led to conspiracy theories among US conservatives that it wants to create a new world government.

At yesterday’s plenary session journalists were only welcome to attend Taoiseach Brian Cowen’s speech. They were also told not to approach conference members and copies of the programme were confiscated from the press.

Attendance lists were not distributed to the media.