Ireland: Labour to Take Fight Against Austerity Into Open
08 August 2013
Posted by: Author: Fiach Kelly
Author: Fiach Kelly (Irish Independent)
LABOUR hopes to force Fine Gael into easing up on austerity in the October Budget by piling public pressures on its senior Coaltion partner.
Senior party figures have decided that behind-the-scenes negotiations will no longer be enough to convince the troika and Fine Gael to bring the level of cuts and taxes down from the planned €3.1bn.
Tanaiste Eamon Gilmore is following the template set in the lead-up to the promissory note deal – which saw dire public warnings from Labour ministers about the consequences of failing to secure the agreement.
This included Mr Gilmore telling German Chancellor Angela Merkelthat the Government could fall if a deal was not stuck, while Communications Minister Pat Rabbitte was reprimanded by Finance Minister Michael Noonan for also making public threats.
Now a senior Labour source claimed the party would adopt similar tactics to try and force the hand of Fine Gael and the troika over the Budget.
"There are times for behind-the-scenes negotiations, and then there are occasions when you need to be louder," a senior figure said.
"This is about sending a very clear signal to our international partners and our partners across the table.
"What Gilmore is saying is not off the cuff, it is very planned, thought-out and deliberate. It is not just the promissory note deal (that helps the case for less cuts), it is also the good progress made on the targets."
The Central Bank, the IMF and the Fiscal Advisory Council have urged the Government to stick to the original €3.1bn adjustment target for 2014.
Labour in particular has argued that the €1bn benefits achieved through the promissory note deal should be used to ease the Budget.
It also claims there is enough wriggle room to ease up on austerity but still stay on target to bring the deficit down to 5.1pc next year, with the ultimate target of getting it to 3pc the year after. But Mr Noonan said he would not make up his mind until he gets all economic data in the weeks before the Budget.
However, the Labour tactic of putting pressure on both the troika and Fine Gael in public could backfire.
Fine Gael TD Simon Harris said: "I think it is not helpful for people to be making public acclamations on the Budget. There is one Minister for Finance." But the Labour source claimed that some in Fine Gael were following an "over cautious" economic analysis.