Instead of a myopic focus on deficit reduction, the government must focus on deficits in infrastructure
The EU Fiscal rules are an anachronistic relic from an austerity era and must be reformed if Ireland’s economy is to rebound as we emerge from the pandemic, according to Social Democrats Finance Spokesperson Róisín Shortall.
“The Summer Economic Statement is informed by the belief that the EU Fiscal Rules, suspended during the pandemic, will apply from 2023. These rules are an anachronistic relic from an austerity-era and will constrain the ability of EU member States, including Ireland, to respond adequately to the once-in-a-century economic shock caused by the pandemic.
“Rather than being resigned to defeat, Minister for Finance Paschal Donohoe should use his position, as Eurogroup President, to advocate for the reform of the fiscal rules.
“The government’s plan is predicated on reaching a headline deficit in the region of -1.5pc of GDP by 2025. Instead of a myopic focus on deficit reduction, the government must ensure that our significant and long-standing deficits in infrastructure – particularly housing – and public services are closed.
“The Summer Economic Statement likens the government’s economic policy response to building a bridge to recovery. However, there is a danger that if the government acts too quickly to reduce the deficit, it will undermine the foundations of that bridge – sabotaging the country’s potential for sustained economic development into the future.”
15 July, 2021