The Secretary-General of the Organisation for Economic Co-operation and Development (OECD), Angel Gurría, was in Dublin recently to publish a report on Ireland’s recovery.
In the context of a continued recovery, Gurría said, “What’s needed today is a strategic agenda for more inclusive growth that promotes job creation and social equity by harnessing the power of entrepreneurship and innovation.”
On hand was Taoiseach Enda Kenny, who said that “Ireland is in a very different place compared to two years ago, when the last OECD Economic Survey was issued. Since then, we have taken and implemented difficult decisions – the results of which are becoming increasingly clear.”
The Taoiseach was commenting on a second successive year of growth in 2012. “There are at last some positive signs on the labour market. And we will exit, successfully, from our EU/IMF programme later this year. Significant challenges certainly remain, but Ireland is emerging from the crisis.
“The Government needs the best possible analysis as we move into the next phase of our recovery,” said Kenny. The Taoiseach went on to laud the OECD’s insight into Ireland’s economic position. “This Government will make our own assessments, choices and decisions – as we are mandated to do – but valuable input such as this OECD Survey can only improve the quality of our decision-making.
“I am also pleased that work with the OECD on tacking Ireland’s Youth Employment problem is agreed, and we expect to have the organisation’s expert analysis and recommendations in hand by the end of November. This particular issue is of fundamental political importance to the Government. It was a key priority of our EU Presidency, and it remains so.”
International Monetary Fund
In a recent IMF transcript published on their website, the Director of the IMF Communications Department, Mr Gerry Rice, was asked about recent comments from the Irish Government and whether they still need to fulfil a rigorous package of spending cuts, given that they are on track to reduce their debt. The question was referring to the possible reduction of a proposed 3 billion euro in cuts.
Mr Rice said: “Our view is that the budget in 2014 should continue the authorities’ track record of steady fiscal consolidation. And this year the government is implementing a consolidation of about 3.5 billion euro.
A smaller consolidation effort is currently scheduled for 2014, helping to reduce the drag on growth. And, again, this will be the starting point for discussions with the Fund, the European Central Bank, and the European Commission. And this will take into account various factors affecting Ireland’s growth prospects.”
National Debt
No matter how well we seem to be doing with respect to cuts and consolidation, we can’t ignore the stark numbers that we face, and they certainly won’t go away overnight.
In 1995, the interest on our national debt was 2.6 billion euro (5.6 per cent of GNP) and the national debt was 38.4 billion euro (80.6 per cent of GNP). These figures were reduced to 1.6 billion euro (1 per cent of GNP) and 37.6 Billion Euro (23 per cent of GNP) respectively in 2007. Now brace yourself: as of 2012, figures published on the NTMA website state that the national debt is currently at 137.6 billion euro (103.7 per cent of GNP), and that the interest required to service this debt is 5.6 billion euro (4.3 per cent of GNP).
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