NEW SOURCES OF INVESTMENT NEEDED FOR GROWTH

6 Oct 2011

Congress General Secretary David Begg has said that private sector investment cannot be relied upon in the current crisis and that new sources will be required to deliver growth.

He said he fully endorsed the recent proposal from Siptu on how pension funds could be incentivised to invest in Ireland.

Speaking at the SIPTU Biennial Conference in Ennis, Mr Begg said: "The only way to get growth in the domestic sector is through investment. Private investment has all but collapsed, so other sources have to be found."

He said that the private sector had "never been a key driver of productive investment in the domestic economy" citing total private investment of €14.5 billion between 2000-2008.

Meanwhile, state and semi-state sectors accounted for investments in infrastructure of some €33.5 billion, over the same period.

"If that was the best that the Irish entrepreneurial community could manage in the good times, what can be expected of them now?"

Mr Begg told delegates that austerity policies being pursued in Ireland and Europe were destined to fail.

"They are.....nothing less than more extreme versions of the liberal market ideology that got us into this mess in the first case.

He dismissed calls for greater austerity measures, citing recent high-profile comments by Mr Peter Sutherland.

"Mr Sutherland is distinguished by his leadership of Goldman Sachs and I can think of no financial institution more culpable in bringing about the crisis, other than perhaps Lehman Brothers," Mr Begg said.

He said the burden of Irish debt - more than two and a half times gross national product - "is quite simply an impossible burden for a country of our size and population.

"The only sustainable outcome is for debt to be handled collectively across Europe through a system of Eurobonds.

"It would be fair because the banking system in Europe is so interconnected that no country can completely isolate itself from contagion. It would be fair too because what was done to us by the banks could not have happened without the deregulation of capital markets which was central to the creation of the EU single market.

"This is something we have argued with the 'Troika' on every occasion we have met them and we will never give up doing so," Mr Begg said.