Funferal

Labour responds to IMF report

Brendan Howlin of Labour has responded to the IMF report on the Irish economy, arguing mainly that the IMF’s ‘one size fits all’ approach would result in Ireland’s need for increased capital spending squeezing current spending. I attach his response below:

“It is predictable, but nonetheless disappointing, that the IMF should have produced such a narrow and conservative review of the Irish economy.
“The IMF is renowned for its ‘one-policy fits all’ approach, no matter what country it is reviewing. The fund is a lynchpin of the so-called ‘Washington Consensus’ which advocates the application of a conservative neo-liberal approach to economics around the globe. It is hardly surprising then, that they should find themselves in accord with our Minister for Finance, Mr McCreevy, on a number of issues.
“The report does not adequately highlight the significance of Ireland’s infrastructure deficit, nor the problems in delivering on the National Development Plan. It does acknowledge the importance of maintaining investment in infrastructure at a time when construction inflation is moderating. But its proposals for medium-term fiscal policy mean that current spending would have to be squeezed to pay for the capital programme.
“Ireland’s capital spending is approximately twice the EU average in order to pay for vital infrastructure. By endorsing a no-borrowing policy, the IMF is arguing for current spending to be kept artificially low while the infrastructure deficit is tackled. It explicitly calls for further cuts in current spending, including targeting ‘transfers’ i.e. social welfare payments. This should not surprise us, from an organisation which has inflicted so much pain on developing countries.
“The IMF report seems to ignore the record rate of job losses in the Irish economy, now running almost one every 15 minutes. The report contains no proposals for tackling the jobs crisis, or for addressing the delays in the National Development Plan that are costing Irish business so much.
“The IMF is now increasingly recognised as being a deeply conservative and unaccountable institution which has done significant damage to developing countries across the globe. If they are commending Minister McCreevy, we should not be surprised, but we should be concerned.”