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Dublin: 10 °C Monday 20 May, 2013

Ireland faces austerity ‘for as long as anyone can look forward’

Economist Joe Durkan has warned austerity will not end with the bailout deal in 2015 – and rejected criticisms of the ESRI.

Joe Durkan
Joe Durkan
Image: Mark Stedman/Photocall Ireland

IRELAND FACES YEARS of austerity stretching into the future, an economist with the ESRI think-tank has warned.

Joe Durkan said that the years of austerity budgets would not end in 2015, when Ireland’s bailout deal with the EU/IMF/ECB troika is due to conclude.

Speaking on RTÉ’s Morning Ireland, he said that even if the budget deficit is reduced to three per cent as planned, further savings will still be required to bring Ireland’s debt-to-GDP ratio down to an acceptable level.

It’s going to go on for a while, for probably as long as anyone can look forward. I think you can take it it’s not going to end in 2015 [...] We have to get our debt-to-GDP ratio down to 60 per cent. And if you’re relying solely on growth to do that, it’ll take a long time for that to happen.

Durkan was responding to high-profile comments from his former ESRI colleague, economist Richard Tol, who said publicly that he was leaving Ireland because of the prospect of “ten more years” of austerity.

Tol warned that the period necessary for economic recovery could be even longer, and that ten years would be “fast” to bring Government debt into line.

The economist, who left for a job at Sussex University in England, also hit out at the ESRI itself. He said that the think tank was “muffled” in its criticisms of Government policy. Tol also told the Irish Times that ESRI economists would “get into trouble” if they “violate[d] policy and upset people.”

Responding to Tol’s comments this morning, Joe Durkan rejected the criticisms and said it was down to the individual to make any criticisms heard. Referring specifically to the period of the economic crash, he added: “I wasn’t there at the time.”

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Comments (69 Comments)

  • Hes wrong . There wont be an economy if we carry on having budgets like the last one. The money just isnt there.

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  • The ESRI have forecast a doom and gloom outlook yet economically the state of stock markets are doing better than ever. This dumping of problems on the state and it’s people seems to have happened throughout the world. We didn’t cause this financial mess yet we are the ones that have to endure austerity. Our government is not going to stand up to the financial system and say your the ones out of control not us you are the ones that came up with derivatives and hypotacation and re-hypotacation why are we being punished. No our government is just a weak little party member of merkozys gang. Tax the people let them suffer it’s their fault not the system seems to be the party line.

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    • Spot on Human Being! Until we get a Government brave enough to take on the wealthy and the public service, nothings going to change. This bunch of clowns are embarrassing! Enda Kenny and his cronies make me cringe. We’d be better off with one of those new unelected experts running the place! Someone that’s not scared to do the right things!!

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  • If folks do not want to protest fair enough. Those who have jobs are too scared to do that for fear of losing them. So civil disobedience is needed. Reject property tax. First step. And let that be first victory.

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  • He’s wrong – cos we got a 5 point plan :-P

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  • I think that Richard Tol has just put in on record, from an official perspective, what we already knew -1: The ESRI are compromised by links with Government and are not truly independent and thus almost acts as a PR agency for the government.
    -2: Almost every economic prediction from the ESRI over the past decade has been off the mark…the question is how/why??

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    • Sad though it may sound but I have been keeping a dairy for a few yrs now. I have kept comments written by the ERSI in the national newspapers and on TV and each one (prediction) has been WRONG VERY WRONG. Mind you so have statments made by the Central Bank. Jst shutup and keep your useless opinions to yourselves. We dont want to hear your sh*te.

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  • I’m getting fed up with austerity so I’m not going to do it anymore.

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  • Hardly surprising news, this recession will be long term stuff, 10 years at the very least, predicted that with no ecomomic experience under my belt!

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  • Gee, Happy New Year!

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    • Everyone makes a joke about everything in Ireland. I don’t understand, its stupid for me. Your lives are destroyed by banks and lying politicians but Ireland is only country in world that just does not care, about anything. Whats more important is pubs and tv, its amazing for me. Other countries people have emotions and at least protest but Irish people just make fun and believe every lie

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    • Trust me sweetheart, I ain’t laughing.

      We know our lives are destroyed for the foreseeable future, if you are lucky enough to earn a living you will see more and more it going into a big fat hole of nothingness. Protesting is all well and good but that’s all it is, a meaningless protest that will change nothing.

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    • Greece got almost half their debt wrote off, they protested, you obey, do what you are told and make fun. With your attitude, your country would never have won Independence, my country would still be communist sweetheart.

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    • Greece didn’t get the debt write off because of street protests

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    • Oh Inn 03/01/12 #

      Lisa,
      Protest in this country the for last 3 years has been weak because of people like you!
      It will be meaningless until the day you get off your defeatist arse and start to fightback.

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    • fool me once shame on you fool me twice shame on me do not vote fg ff lab greens in next election

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    • I think the humour is our way of dealing with everything – its what we are famous for around the world. Should we all be negative and depressed 24 hours a day or should we get on with it in good spirit when we can? We can fight for a better country and still have time to smile I think.

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    • What do people want? I would be all for a one day of action where everyone lays down the tools but I just think so many people are hard up and too scared of the repercussions to do anything like that. So telling people they are weak because they don’t behave like the Greeks is unfair.

      The problem with protests like Occupy Dame Street movement is that it has no focus, no fixed idea of achievement and is therefore totally useless. Well meaning, but futile. However, if there was a target, a focus then we would be getting somewhere. How can I take a protest seriously if I don’t even know what I am protesting for? You can’t achieve anything with no tangible goals.

      All I know is that people want the austerity measures to ease up but we all know that it’s not in the hands of our government so what do we do? Burn down the german embassy? Stop buying french wine or Belgian chocolate? Do we take all our money our the banks and hide it in our mattress?

      Because ultimately no matter what we do its all going to land right back on top of us again, we own the banks so any damage to them effects the tax payer. Exports are the only thing keeping our economy from halting altogether so we need a healthy EU.

      If someone can come up with a protest that isn’t sitting outside a bank in a tent or won’t end up shagging us in the ass let me know what it is.

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    • Blind optimism is worthless. People need to realize that the country is broke, living on handouts and governed from outside.
      We’re getting all sorts of comments criticizing negative spin and doom and gloom. The optimism is easy while our welfare, public service pay, state services etc. are being supported from outside by ponzi scheme that is ready to crash. The private sector is on it’s knees and is way beyond ever supporting the bloated public service.
      We can whistle in the wind and pretend all will be well but that won’t happen unless we are serious and determined to realize that decisions are being made on our behalf by discredited politicians and state institutions. Unless there is a determined effort by the Irish people to optimistically determine that they will root out greed and corruption dishonesty in our government and state institutions we’re scuppered plain and simple.

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    • Lisa.
      We can refuse to pay the household charge or any other similar austerity measure that this government introduces and force a situation where the government falls by opposition in it’s own ranks. When the chips are down politicians abandon party loyalties and whips and think of their own political skins
      Force the collapse of this center right Merkozy government and demand an emergency all party government without obligation to corporate interest that will represent the people not their cronies in Europe and at home.

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    • And i meant to add: And then take it from there.

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    • Lisa,
      The Next and possibly last opportunity that we as a people have to stand up against the current situation where we are being made to pay for portfolio and investment managers who got it wrong but who are not being allowed lose, is by campaigning against and refusing to pay the Household Charge!
      We are being spin a huge porky that this charge is going to pay for libraries and street lighting .. Does anyone really buy that!? It is completely regressive and punitive and is looking for water from wells that are completely dry.

      There is a huge campaign here in co. Wexford already underway. Blanket refusal to pay it and lobbying of our TD’s will put huge pressure on them and as they are mostly self-serving, this could force a radical change in how the government acts or even could cause a split! There’s your clear goal and objective!

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    • Well I agree with that Nigel and I really believe people shouldn’t pay it. That’s a great suggestion.

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    • Oh Inn 03/01/12 #

      Lisa,
      That one day of action you mentioned is neccessary.
      It wont just come out of thin air, a movement needs to built first, if someone called for a nationwide day of action now it would be unlikely to have much an effect. A mass movement needs to be built first. That can happen through people like you and me getting involved in existing campaigns or starting campaigns of your own.
      It is up to all of us to build this neccessary movement, get involved with some imperfect protests and make them a little more perfect, let everyone know how pissed off you are about the mess we have been forced into, let everyone know that you are ready to fight back, express your anger to your TDs, stay informed, dont let the IMF / ECB / government dictate the parameters in which we discuss the economy, join up with some of the many groups campaigning against the austerity, dont wait for a messiah to lead us into a national day of action and solve our problems – it is up to all of us. There will be many false starts, hurdles and failures on the way, but we should use each one to gain strength and numbers for the next effort. If we do this then victory is inevitable…. eventually.
      the next 10 years could be crucial for long term future of society.
      Either the people will stand up for themselves and take back the wealth and power from those who have been hoarding it, or they will accelorate their theft, leaving us in much worse shape than we been in generations. There will be no middle ground in this. The appeasments they have used to placate us for the last 40 years will no longer be possible, things like social welfare, free education will be a thing of the past, capitalism can only afford them when it is doing very well.

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    • So I become a rent a mob member and join up with any group that is protesting anything. Today it’s third level fees, tomorrow it’s cut to private schools?? How would I get time to go to my job that it took me a year to get? Its just all too convoluted and arbitrary.

      I think the Irish people have been so quiet is because they know that there is no way to take back our economic independence without unraveling the very fabric of society. The time to protest was over three years ago when FF and many of the Dail voted to nationalise the debts of our banks and we missed it. I think that’s why people are relatively passive in comparison to our European brothers, we know our chance to change our fate is as dead as Brian Lenihan.

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    • Oh Inn 03/01/12 #

      Unraveling the very fabric of society?
      is that not what we are seeing happening right now? If you are so sure there is no hope at all, why are you even discussing it? I suspect it is because you are not sure there is no hope.
      As for becoming rent a mob for any cause whether you believe in it or not, thats not what i was suggesting. I was asking you to make your voice heard and help to bring about the national day of action you mentioned.
      You say the time for protest was 3 years ago, will you say the same thing in 3 years time? and the same again in 6?
      “the best time to plant a tree is 20 years ago, the next best is today!”
      I understand that you dont have the time to give to continual protesting, you are expending time and energy here AGAINST hope and protest, using your energy to maintain the status qou! why not use even that little bit of energy and time to do the opposite, when huge numbers of people make a small effort, thats when we will begin to stand a chance against those who are currently milking us dry.

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  • Austerity my foot. There will be no austerity measures for the decision makers who ruined our country.

    One example that comes to mind is the billions of euros of taxpayers money that was squandered in the Anglo sellout of the Quinn Group for the foreign bondholders, but then we have to remember that M Noonan is himself a bondholder as it has been confirmed that he owns German bonds.

    For the record and for the people who have been misled by the Anglo and Government spin, a proposal was put forward by Quinn which would have meant that the taxpayers would not have been burdened by one cent and thousands of extra jobs were at an advanced stage but what did our Government facilitate? The inappropriate and unjust elimination of the QUinn Proposal without any consideration. You wont hear that sid from the Anglo PR machine.

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  • New rule of thumb: if the ESRI say it will be X, the reality will be much worse.

    Well… that’s not a new rule, really. Bloody apparatchiks.

    Reply
  • Ed 03/01/12 #

    An important question here is how long will we the people continue to lie down and take beating after beating from our elected leaders…

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    • As long as the majority of people can afford a middle class standard of living.

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    • and remember, just because we elected them does not mean we have democracy or true representation…..

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    • What are you talking about? The people knew full well the difference between the left policies and FG policies but still went and voted FG anyway. And what’s worse, FF are rising in the polls. It sickens me to say it but alot or Irish people don’t have a clue what they want.

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    • That’s right Adrian.
      Until the people make their minds up about what they want we get nowhere.
      If Kenny thinks he has a confused, dejected and frightened electorate then he can do as he likes, or more importantly give in to pressure in Europe. The Government should fear us, we should not fear them. If Kenny thinks he has to deal with an assertive, demanding public who will kick him and his buddies out of Government at a whim well then he will think twice about being a Merkozy messenger boy.

      Reply
  • Ah yes the 5 point plan the panacea of all ills

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  • Joe Durkan is right about the big lie that Ireland’s economy will recover in any forseeable future. But, like all the rest of Ireland’s fat-salaried, austerity-free economists, I’ve not noticed him offering the correct solutions.

    The fact is austerity is self-fulfilling. Keep taking more money out of the economy to repay vast & ‘odious’ debts to private banksters & it will inevitably decline. Less money=less spending=less jobs=less spending=less jobs=…and so it goes.

    Ireland’s only chance – & it was always a slim one – was that massively incresed & job-rich exports would provide income. At best this was still going to be a very slow means of recovery – a decade at least before unemployment reduced. (The so-called ‘models’ that suggest otherwise are the same works of fiction that failed to spot any problem meer weeks before the crash. They are as intellectually bankrupt as the mainstream economics ‘profession’ globally.) But, export growth is not ‘job-rich’ & simply cannot happen when every other country, to whom we would export, is killing its own economy with austerity. Keynes famous fallacy of composition is being ignored again. Yet, with its new ‘pact’ of Orwellian titled ‘Stability & Growth’, this is precisely what the overlords of the Troika are demanding. But, of course, austerity doesn’t apply to the top few percent.

    Notice tho’, how easy it was for the ECB to create €500 billion at the stroke of a keyboard to lend to Europe’s ‘poor’ banks at a mere 1% interest. Money that will just allow them to continue their gambling – none of that will find its way to investment & capital formation of the real economy of Europe.

    Yet they say nothing can be done to create money to halt austerity & stimulate job creating demand. This is a lie. Recovery can come only one of two ways – by either private money creation or public money creation. It makes no difference which it is to the economy, for inflation or anything else, . When the economy is shrinking, the private sector will not do it. The private sector consists of individual actors – none will take the risk of ‘jumping’ first & risking loss competitive advantage, or even worse, bankruptcy, if others do not follow. This leaves only the public sector left to spend to stimulate the new job creating demand. But instead, the absentee landlords of the ECB etc. & their politician agents insist on doing the exact opposite. There is no macro economic reason for this, other than the top few percent get to make themselves richer from the inevitable ‘firesale’ of assets in a continually depressed real economy.

    This is ‘Anchlus’ economics inflicted by Europe’s elite on the working (& jobless) ordinary citizens. Pure & simple.

    Ireland has two solutions in the face of this. Either insist that the Eurozone makes use of its money creation powers for public purpose, or exits the Euro & does this with its own new currency.

    Or get on your knees before the new landlords, same as the old, & forget any notion of a sovereign republic of free citizens.

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  • No surprise here……….. it obviously hasn’t sunk in yet with people how much Kaiser Biff et al has brought to bear on Ireland! Jeez I’m so angry. And still we allow the perps live a life of luxury…… I’m truly amazed at the apathy of the Irish people!

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  • Oh just take my whole f*****g wage packet every week why don’t ye

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  • I’ve no doubt at this stage that 2012 is going to be our worst year, possible euro departure, complete restructuring and default of debt, possibly huge budget mid year to balance the books. BUT, the great thing about it being the worst is that it will be a clean slate, despite how messy things will be a we’ll finally have confidence,not just financially but as a society in general with a genuine vision for the future. And people just might dare to started spending again. Heres hoping.

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    • Agree with you, just let us hit rock bottom so we can come up again

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    • Adrian, is there something to back up your prediction. The only bit i like is the clean slate. If your right it will be a very small slate.

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    • Oh Inn 03/01/12 #

      Have you anything to base that on other than groundless optimism?

      Looks to me like every year will get worse and worse for ireland, until we grow back a pair of balls.
      I am disgusted by the lack of people willing to fight back and defend themselves.
      What has happened to us?

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    • Possible euro departure will create definite chaos for years, very high interest rates at up to 10% like before we joined the ERM. Inflation will be high and last for years.

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    • Adrian, wish you were right about bringing things to a head and moving on but I don’t think there’s a hope in hell of this happening with a government that straddles the economic divide and compromises on everything. Maybe if the coalition fell apart and we had a real election to decide on a clear way forward we might progress though even in that case I fear we’d get a few more years of populist denial government before eventually (and too late) seeking to address our real structural issues.

      Reply
  • The big thing is what will happen when a general election comes around again. Will FG/Labour be wiped out and will Sinn Féin rise to take their place. There will be a lot of national sentiment when the anniversary of 1916 comes close and who will stand to benefit. Maybe europe will want a national gov or puppet gov like they have in Italy to prevent this.
    However like the person above said this country cant take 5 more years of austerity. We could be back to sterling if the UK continues to be excluded from europe.

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    • The establishment have falsified the rule books of Ireland to use opinions over 8300 times since 1922.

      Democracy is about choice. Opinions hide the details and take away the choice.

      You can’t have a democracy with choice.

      You can’t have a democracy in falsified rule books.

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    • That certainly is the way the political landscape is panning out!

      SF’s rise in he last GE and Presidential Election will be multiplied by Labours failure to truly represent a socialist fundamental in government and also reneging on so many pre-election promises.

      SF will mop up the socialist leaning voter in a final hope they will represent a socialist value if in power, at the main expense of Labour who will return to single figure TD’s!

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    • Are you suggesting we rejoin the UK so we can go ‘back to sterling’ ?!

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  • Firstly austerity is a comparative term. Cuts and tax increases are a certainty until 2014/15 when the fiscal deficit is brought to an acceptable percentage of GDP. Whilst it is true that the government must the tackle the debt to GDP ratio.

    Whether or not this will lead to even more austerity is pure guess work. It wll depend on the annual growth of GDP. Remember we are talking ratios not absolute amounts. Of course it can all go pear shaped if the economy reduces rather than grows.

    Ther is little point in attempting to predict economic conditions more than 2 years out when there are so many unknowns on the international scene, e.g. Chinese inflation, US presidential election, falling euro exchange rates, growing economies of Brazil, India and Russia, which way will oil prices go etc. etc.

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  • Let’s Break. You can’t internally devalue while tied to a currency you don’t control without cutting lumps out of all gross pay which in turn prevents required growth.

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  • How can this be true when we have fantastic leaders that are so in touch with the electorate, I’m sure this comment is a wind up !

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  • Yes John Murphy
    I fully agree.
    As I always say: Irish democracy is: what everbody wants, nobody gets.
    Politicians only ask what you want prior to elections when you get that desperate knock on your door.

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  • r these people trying to drive people over d edge altogether.first week in a cold and wet january and they come out with this sh..e.i think we should all just pack d bags and leave em to fight over d scraps and highly paid salarys there all fighting to keep.our fine country is totally wiped out…

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  • Aaron 03/01/12 #

    Can we stop with all these doom and gloom reports from idiots who who wouldn’t be able to predict snow in the middle of a blizzard. It’s all guess work with them and the more they scare people with their predictions the longer our recovery will take.

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  • Richard Tol was happy arrive into Ireland, take a good salary and live here when times were good.
    Where is he now….? Ahh heading off following the money, leaving us to battle without him.

    Thanks for nothing Richard, your opinion holds no value for me.

    The same has happened with thousands of others who were allowed in here to work under FF

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    • Tol’s departure offers a valuable insight into the working of the state and the extent of the propaganda that is being feed to the Irish public.
      If ESRI reports are being influenced by the government can they continue to be regarded as credible (if they ever were).
      Should the ESRI continue to be funded by the taxpayer if they cannot function objectively?

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    • He’s a bigger loss to the country than Kevin Cardiff.

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  • Ian F. 03/01/12 #

    I really wish I had the means to get the hell off this sinking island. We’re doomed here. Where is there to go that’s any better though?

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  • Does a bailout deal conclude as Joe Durkin claims?
    If Ireland fails to honour its financial committments by 2015 then the austerity continues until we are even.

    Reply

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