9 Jul 2012

Congress has told Troika officials that rising unemployment, 'flatlining growth' and a 26 percent collapse in domestic demand means the pace of Ireland's adjustment programme must be slowed to prevent further damage to the economy.

Speaking ahead of a meeting with Troika officials, Congress General Secretary David Begg said the key objective must be to "do no further harm and then invest to offset some of the damage already done, to create jobs and boost domestic demand."

Mr Begg said to avoid deepening the current slump Ireland's 'adjustment period' had to be extended to 2017.

"If we stay on the planned trajectory it is almost certain that greater damage will be done. By slowing the pace of adjustment we could avoid deepening the slump, while a major investment programme could offset some of the damage, in terms of job losses and collapsed domestic demand."

He explained that a Congress plan - Delivering Growth & Jobs - outlined how the investment programme could be financed without adding significantly to Government debt.

"It could create 100,000 jobs and give the domestic economy a real boost. We believe that some 80% of the expenditure would stay in Ireland and not 'leak' overseas, while a full 53% would be returned to Government by way of taxes.

"Equally, it is vital that public services and welfare transfers are maintained at current levels," he said.

Mr Begg criticised advocates of even tougher austerity and said their prescriptions would prove catastrophic.

"Some claim that we need to follow the example of the Baltic States and adopt a hyper-austerity programme. But a new Congress study - The Baltic Fallacy - shows clearly that Ireland would not benefit from adopting this model and that there is little in common between Ireland and those states.

"As the publication says, the idea that we have anything to learn from that hyper-austerity model is a complete and total fallacy," Mr Begg concluded.