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The Labour Party spokesperson on finance, Joan Burton. Julien Behal/PA Archive/Press Association Images

Opposition react to public finance shortfall

Politicians were briefed by the Department of Finance today about the state of the nation’s coffers.

SENIOR OFFICIALS FROM THE DEPARTMENT of Finance have been providing opposition politicians with confidential information about Ireland’s finances.

Secretary-general Kevin Cardiff led the officials in meetings with Labour’s Joan Burton, Fine Gael’s Michael Noonan, and Sinn Féin’s Arthur Morgan.

The meeting was a precursor to a meeting between Brian Cowen and opposition party leaders later this week to discuss the government’s four year economic strategy. Sinn Féin will not be participating in that meeting because it  does not agree that Ireland’s deficit needs to be reduced to 3% of GDP by 2014.

In a statement released by Burton today, she said Ireland’s budget deficit “will be the highest in the world this year” and warned that the “country’s very sovereignty is in peril as we try to avoid the cold embrace of the IMF”.

Responding to her meeting with the Department this morning, Burton called for a balance between cuts and growth in the budget:

Killing the economy to save it is not the way forward.

The IMF were in town last week with a timely warning that should be borne in mind: there is no such thing as an expansionary fiscal contraction – every 1% cut in the deficit will shrink the economy by 0.5%.

After his meeting, Fine Gael’s Michael Noonan said “no decision should be made in regard to rectifying the public finances without involving the public in the debate”.

He said that while he was bound by an agreement not to disclose confidential data, he suggested that adjustment would be higher than the €7.5bn planned by the government. He said that the “lower anticipated growth will require a bigger adjustment than any figures as yet published in any plan”.

Noonan called on the government to bring forward the break-down of its individual budgetary decisions because “until they do, it is impossible to quantify the adjustment necessary”.

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