IRELAND'S DAY-TO-DAY spending will have to be cut back sharply for years, the country's European Commissioner Charlie McCreevy has warned.
"People shouldn't kid themselves into thinking that past spending levels are sustainable," he told the Association of European Journalists in Dublin.
"Diminishing tax inflows cannot be replaced with ever rising levels of public sector borrowing in order to sustain spending levels that are simply not sustainable indefinitely."
Ireland should not believe that the financial markets will be happy indefinitely to lend more and more: "Investor appetite for Government debt is not limitless.
"We need to guard against this - otherwise we will be propelled into a downward spiral where rising borrowing costs have to be met by even deeper spending cuts," he said. Describing some of the economic problems as "mayhem", the Internal Market and Services Commissioner said: "I cannot say with any confidence that we are through the worst."
The world's problems are our problems, he added: "For some it will be losses of jobs. For others it will be cuts in pay. For many - as stock markets have halved - it will mean substantially reduced pensions. Governments everywhere are now having to think the unthinkable, and nothing - nothing - can be taken for granted," Mr McCreevy declared.
Criticising those unhappy with the defeat of the Lisbon Treaty referendum, he said: "You can't just flit in or out of democracy.
"You can't just like it when it gives you the result that you like, and not when it gives you the result you don't like," said the Commissioner. Despite this argument, Mr McCreevy then sought to argue that the Irish Government has respected the wishes of Irish people since the referendum defeat. He said he had not detected "any animosity" towards Ireland since the Lisbon No vote from other member states, though "at the highest levels there possibly would be a level of frustration".
However, he said, the vast majority of the European Union's day-to-day work is carried out by a myriad of little-known committees where Lisbon has had no effect.
However, he said it is possible other member states "are holding back to see what is going to happen in Ireland. Perhaps they are being wonderfully nice to us. There might be a little bit of that. These kind of things are very subjective."
Mr McCreevy's term in office is due to end this summer, though there is a chance that the outgoing Commission may be asked to stay on for a few months, until some conclusion is reached on Ireland.
In an interview last week with Hot Press magazine, the Commissioner said: "You must remember that each country had to ratify this particular treaty. If the only answer to the question is 'Yes', there was no point in putting the question to any of the other 26 countries either."
He rubbished the idea of Ireland being somehow isolated if it did not conform. "There is no provision to throw out anybody, unless unanimously all the existing members of the club agreed to throw you out. And I doubt now, or in the future, any Irish Government is going to unanimously agree to throw themselves out."
