Ireland to Stick to Austerity Program: Deputy PM
Ireland has emerged as a poster boy for austerity within the euro zone, and the country’s Tanaiste (Deputy Prime Minister) told CNBC that the secret is determination from its people and quick decision-making.
Eamon Gilmore said: “There isn’t great enthusiasm for austerity but there is an understanding that decisions have to be taken and discipline has to be maintained.”
“Reining in expenditure is always difficult. There’s no easy way of doing it. In Ireland, we have a strong stable government. We determined that we were going to turn this problem around and stick with that program.”
Gilmore’s government, elected last year after the previous government became increasingly unpopular when it accepted a bailout from the troika of the International Monetary Fund(IMF), European Central Bank(ECB) and European Commission, has come under fire in recent weeks ahead of December’s budget.
Ireland has won praise internationally after returning to growth, winning foreign direct investment, getting back into the bond markets and beating some of its deficit reduction targets. Yet the country is still struggling with high unemployment, low consumer spending and rising emigration.
“The key thing is that you look at the crisis as it is—you can’t wish it away,” Gilmore said.
“It’s a case of getting off the canvas. There’s no point in dwelling on the past. We faced up and into the crisis and had a sense of determination that we were going to get out of this.”
He lent his support to European Central Bank plans to intervene further in the euro zone economy via a bond-buying programwhich could help out Spain and Italy, announced on Thursday.
“I don’t think other countries have got away lightly. We don’t want to be in the situation other countries have found themselves in,” Gilmore said.
Other countries such as Greece have been criticizedfor not enacting austerity reforms soon enough, and the conditions of a potential bailout for Spain have become a hot potato in the euro zone.
“We made a number of decisions very quickly. We worked with the troika to make adjustments to the program. We’re somewhat ahead of target in terms of reducing the deficit. We’ve returned to growth. We’ve put an emphasis on attracting foreign direct investment and, most importantly, we have a sense of solidarity between our people,” Gilmore said.
“Sticking to the targets are very important to maintaining confidence. From time to time there will be slippage, and then you have to get it under control.”
- By CNBC's Catherine Boyle