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April 19, 2012



All very cogent, all very rational and well argued. Completely undermined by SIPTU's treacherous endorsement of the Treaty. Likely to be followed by ICTU.

I've followed the evolution of SIPTU's thinking on the treaty, as far as a plebian member can, and I don't think I've seen a sorrier stream of delusional thinking in my entire life. It rests on the entirely delusional premise that THIS government, of all governments, are going to pluck 10 bn euro out of thin air between now and 31 May for a stimulus package. And, moreover, that after 31 May should the Treaty be safely to bed (almost certain now) SIPTU seem to think a FG led government are going to find 10bn euros for stimulus. I can see FG TDs having a hearty laugh over a few pints at SIPTUs naiveity.

SIPTU have effectively backed the injection of the present austerity with angel dust and it ain't gonna be the bureaucrats in Liberty Hall feeling the pain. Shame, shame, shame.

Dave M

Hi Michael,

Good article. You had previously used the figure of an 'adjustment' of €5.7 billion to reach the 0.5% target. You now say it could be as high as €8 billion. You had said it could be higher than the 5.7, is 8 billion now the more realistic figure? Is this based on latest figures released by CSO or the gov?

Michael Taft

Dave - I had used the €5.7 billion as a 'static' measurement. In other words, you just take difference between the Government's projected structural deficit of 3.7 percent in 2015 and subtract the target of 0.5 percent. That leaves a 3.2 percent gap, or €5.7 billion in 2015.

However, to reduce the structural deficit will mean more than €5.7 billion in cuts. This is because fiscal adjustment will lower the actual GDP and possibly the potential GDP (the output gap) from which the structural deficit is derived. It is hard to give an estimate. I am currently doing a follow-up paper for the Committee on the different fiscal adjustment estimates to close that gap. When I have sent this in, I will publish it.

But these will be only estimates based on historical trends.

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