It is becoming great sport following up the Minister for Finance’s comments. However, a retraction: in the previous post I compared the Government’s projections from April 2011 and April 2012 – following on from the Minister’s curious comment that things were better this year. In that post, I also referred to comments the Minister allegedly made at a Bloomberg conference, suggesting that we should give up simplistic notions of social justice. It now appears that this was a hoax – as reported by Peter Geoghegan on the London Review of Books blog.
Apparently the comment could have been inserted by a mischievous hacker. The problem with this story is that the inserted quote was wholly believable coming from a Minister who opined on the trade relationship between Ireland and Greece being all to do with Feta cheese or who assured poor people that the VAT rises wouldn’t affect them so much because they had little to spend. Nonetheless, the ‘social justice’ comment appears to be a hoax. The deteriorating Government projections, however, are in black and white – published by the Government itself.
But, wait, the Finance Minister was at it again on This Week:
RTE: You mentioned we wouldn’t be in the mess we’re in if the Fiscal Treaty had been in some years ago. This would have saved us from getting into the deficit problems we got into. But how would have that prevented that given that at the time the IMF and the European Commission were complimentary of our structural deficit?
Noonan: What I was saying was that if this was a matter of law - Ireland or Spain or Greece or Belgium or Cyprus - if this was a matter of law six or seven years ago and people had to fulfil their obligations to balance their budgets, that’s the point I was making. . . . It’s a straight forward point and without contradiction.
Well, that is pretty definitive. And pretty wrong. What were the EU estimates of the structural deficit (it’s proxy – the cyclically-adjusted budget balance) at the end of the speculative boom period?
The exception is Greece – who has had long-term structural problems. For all the other countries, they were estimated to be in compliance with the Fiscal Treaty. Ireland, Spain and Belgium were consistently in compliance, with the odd blip. Cyprus started out in trouble but by 2006 they were in compliance.
So what is the Minister talking about? Does he even realise the data contradicts him? Or does he care?
Of course, this is the Minister who reduced the problems of Greece to feta cheese. And here he is again on This Week defending his Greek comments:
‘I’m trying to stop contagion. It’s one of my jobs as Finance Minister to protect the Irish economy.’
How do risible comments ‘stop contagion’? And wouldn’t he be better off actually describing the reality of the Fiscal Treaty, rather than pretending it would have done something that it never would have done?