Kenny urged to follow IMF line

 

The Government has been urged to abandon severe budget cuts in line with observations from the International Monetary Fund (IMF).

Yesterday, the IMF said Ireland could delay some of the cuts required under its bailout programme if the economy grew more slowly than expected next year.

In the Dáil this afternoon, Independent TD Shane Ross asked Taoiseach Enda Kenny to give a commitment that, in the next budget at least, he would consider not going ahead with the severe cuts which had been predicted.

Mr Kenny said he noted the comments made by the IMF. “They also make a particular point that a commitment given to this country by our European colleagues needs to be followed through,” he added.

Mr Kenny said the IMF had been largely supportive of the Government’s efforts to improve the public finances. “Nobody ever said it was going to be easy,” he added.

He noted the IMF recommendation that there be no supplementary budget until 2015, if that be the case.

He added that the budget for 2013 had been put through the House and, while it would be challenging for many people, there was a focus on business, jobs opportunities and further investment to grow the economy for the third consecutive year.

Mr Ross said the “high priests of austerity” were standing back in shock at the fact that the Government was continuing to pursue cuts which they believed would be damaging for the economy.

The Washington-based lender said Ireland had so far shown “steadfast policy implementation” with the conditions of its loan programme, despite slower growth this year.

The IMF's board agreed yesterday to disburse around €890 million to Ireland after it completed the eighth review of the Irish bailout programme.

David Lipton, the IMF’s first deputy managing director, said Ireland had met all targets so far in its two-year-old bailout programme.

But the IMF projected growth would slow to 1.1 per cent in 2013, and 2.2 per cent in 2014, making it more difficult for the Government to meet debt-to-GDP targets.

This ratio, which reflects the sustainability of debt, is expected to peak at 122 per cent in 2013.

“If next years growth were to disappoint, any additional fiscal consolidation should be deferred to 2015 to protect the recovery,” Mr Lipton said in a statement.

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