Taoiseach attacks economy's doubters

The Taoiseach, Mr Ahern, has defended the Government's economic performance against what he described as the "blinkered orthodoxy…

The Taoiseach, Mr Ahern, has defended the Government's economic performance against what he described as the "blinkered orthodoxy" of pundits in London, Brussels and Frankfurt who maintain the boom cannot continue.

Addressing the Irish Management Institute annual conference in Killarney, Mr Ahern also warned that pay claims outside the Programme for Prosperity and Fairness (PPF) will not be entertained by the Government. He signalled also that public transport would be opened to competition "but not complete deregulation".

Mr Ahern said a crucial aspect of the Irish economic model was to harness the dynamism associated with the US economy with a European ethos of social partnership and cohesion.

"Provided we maintain our discipline, we will have great pleasure in confounding the pundits in the City of London, Brussels and Frankfurt, who, blinkered by orthodoxy, still cannot quite understand how the Irish of all people have managed to get it right, and who are so certain that it cannot continue."

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This analysis was incorrect, Mr Ahern said. "It's amazing how people can hold onto their jobs and still get it wrong." Politicians who made similar errors would not be re-elected.

"Ireland is thriving in the euro. Even among Unionists in Northern Ireland, there is a recognition today that something of profit can be learnt from our experience."

But vigilance was required at all times, Mr Ahern said. "When we have the formula that brought us sustained success over the past 14 years, we should continue to apply it and not conclude that we now no longer need it.

"Continued consensus on the best way forward provides infinitely more authority to the individual decisions that follow from it than the Government or any other social partner acting on its own."

The Taoiseach said a "two tier" system of setting pay structures outside the PPF would create a "free-for-all" situation.

"The pay-related provisions are the cornerstone of the programme . . . Adherence to the letter and spirit of the agreement is vital."

He continued: "The Government cannot entertain a two tier approach, whereby some would seek to gain undue advantage over everyone else, irrespective of the perceived merits of any given case.

"To do so would be unfair, could undermine social partnership and might easily herald a free-for-all situation whereby low paid people and other vulnerable groups would suffer most. It is important to recognise that the non-pay elements of the programme are contingent on the pay terms being adhered to."

On transport, Mr Ahern said policy was now focused on providing volume, range and choice in a competitive environment.

"The interim settlement of the recent Dublin Bus dispute on the basis of providing a better and more efficient service points the way towards a positive outcome for the public and transport employees alike. There will be more competition, but not complete deregulation, in the times ahead."

Later, Mr Ahern said he hoped a framework would be established by the summer for reviewing the 1932 Transport Act, which underlines CIE's monopoly. Discussions to review the bus market had already begun, although the process would also embrace the road, air, rail, shipping and taxi businesses.

While stating that the electronic and digital industries were crucial to the future success of the economy, Mr Ahern said small and medium-sized businesses were lagging behind in embracing technology.

"I would appeal to you to put the information society, the Internet and e-commerce on top of your board's agenda for this year," Mr Ahern told delegates. "It is not about technology. It is about business."