The Sinn Fein finance spokesman, Pearse Doherty has tweeted following his party’s meeting with the bailout troika of the ECB/EU and IMF, that “Troika wouldn’t rule out mini budget latter this year if we r not able 2 meet targets – told me we will cross that bridge if we come to it” This is at odds with IMF statements late last year which said that further adjustment would not be required in 2012 even if slow economic growth were to mean the target for 2012 – getting our budget deficit down to 8.6% of GDP – were not met. The IMF said “the planned amount of fiscal adjustment should be maintained in the event of adverse developments to avoid amplifying policy procyclicality.” If Pearse’s tweet is confirmed, then it seems to indicate a shifting of position.
Separately, Independent TD Shane Ross challenged An Taoiseach Enda Kenny in the Dail this morning over official projections of economic growth in 2012. Budget 2012 projected real Irish GDP to grow by 1.3% in 2012 which is higher than recent forecasts from the EU, ESRI, IMF and some economists, which have tended to be in the 0-1% range. Enda however insisted that he was optimistic about the official growth projections and reminded us that the economic situation in our export markets is fast-changing and that it is too early to abandon the official estimates. That is fair enough, but you would have to say, having considered the number of forecasts below our official forecast, that there is more downside risk than upside. The effect of lower economic growth is we bring in less taxation, we probably spend more on social welfare and the deficit % of GDP increases.
So the above is of concern. But what really seems concerning from this perspective is that whilst the rest of Europe is focussing on strategies to engender growth, the heart of Europe seems unconcerned about Ireland and the ongoing austerity. When the ECB president Mario Draghi spoke last week about Europerecovering from the economic crisis, he spoke of an acceptance for the need for growth measures. But when by Derek Scully from the Irish Times asked (from about 54:00 on the video of the press conference) about how programme countries (Portugal, Ireland and Greece) might develop growth measures, Mario was emphatic and said no, he wasn’t giving a green light for programme countries to abandon austerity and deficit balancing so that they could pursue job creation measures for example.
Unemployment figures released for the UK this morning showed that the Northern Ireland unemployment rate now stands at 6.8% compared to 14.3% here in December 2011. With a mini-Budget a possibility, with lower than projected growth a probability and with sky-high unemployment, it seems the country needs growth measures more than ever.
NAMA Wine Lake 
Not to be a party-pooper…but would they have ruled one out if we had been signifcantly below our deficit target in 2011? or 2010?
Seems rather obvious to me that “additional” measures would be necessary if something drastic happens in terms of Exchequer returns.
Hmmm…
I wonder what growth will be like inside Europe if Greece leaves the Eurozone?
@NWL
A mini-budget has been on the cards right from the two day budget announcement in December.
There is a lot of aspirational stuff both on the tax side (VAT) and the exp savings side. And the growth figures have disappeared down the new very expensive European Austerity Toilet Bowl.
But a mini-budget is nonsense.
Ireland should balance its budget in one fell swoop with State of Emergency budget by letting the Axe fall on those that can bear the blow. Only problem is that those swinging the Axe are those that can bear the blow. And they have no intention of doing any hurt to themselves.
While there is no liquidity in the economy, there is no chance of growth. Those who have money squirreled away are not spending it and won’t either. One private investor that I am aware of sits and collects a risk free 8% on Irish bonds. Why would he catch the falling knife that is the Irish domestic economy?
I was talking to a friend’s daughter the other day and asked did any of her family talk about NAMA. She told me “No” – that I was the only one she heard discussing it and that her parents thought that I was obsessed about it. A salutary lesson and dose of cold water to remind me that there is a life beyond NAMA…… From the mouths of babes.
@WSTT
The babes will in time pay for NAMA and the debt mountain bequeathed by the Irish governments and their European and banking masters. At that point they will be bonded slaves to a debt imposed on them.
They are unlikely to appreciate their position.