Congress Rejects Calls for Cuts

13 Oct 2009

The Irish Congress of Trade Unions today (October 13) rejected calls from the ESRI and the new Governor of the Central Bank, Patrick Honahan, for economy-wide cuts in nominal wages.

Congress Economic Advisor Paul Sweeney said: "This action would be deflationary and would simply make matters worse."

He pointed out that the ESRI itself had conceded that the forthcoming December Budget would be:

a) deflationary
b) would prolong the recession
c) would reduce the tax take.

Mr Sweeney criticised the ERSI's insistence on continuing the process of fiscal adjustment over a short timeframe, ensuring that the cuts are far harsher.

"The Budget will be harsh enough," he said. "But by extending the timeframe of the Recovery Period beyond 2013, the destruction of viable firms and jobs can be mitigated.

"The Government must not impose the brutal Budget adjustment advocated by certain economists. In the crisis, we must work constructively together to protect jobs, the low paid, middle income and vulnerable workers and citizens. That the ESRI singles out only wage-earners for cuts is telling. Where are their recommendations in relation to the wealthy paying their share?" Mr Sweeney asked.

 

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