13 September 2000 Edition
Wim on a whim
BY MICHAEL PIERSE
So Wim Duisenberg, President of the European Central Bank (ECB), has told those of us living in the 26 Counties that we need to avoid a `giveaway budget'. So what?
Duisenberg's warning came as the Dublin government initiated another of its good cop-bad cop routines, with Bertie `man-of-the-people' Ahern playing the nice guy who wants to help everyone and Mary `don't call me babe' Harney warning Bertie that he has to help her rich pals first. The Taoiseach boosts his image as the soft-touch Taoiseach, while Harney keeps in with that small (and dwindling) group of financiers still willing to back the PDs. Political spin at its most revolting.
Apparently, Ahern had wanted tax-cuts to benefit the lower paid, but following the Duisenberg warning, his seemingly simple and fickle mind has changed. Now, it appears, inflation will be limiting the fiscal scope for tax reductions.
The old way for tackling inflationary problems was to alter the interest rates and exchange rate employed by the state. However, this responsibility has been taken out of the hands of the too fickle Taoiseach and given to the ECB. And who's the head of the ECB? None other than our friend Wim Duisenberg - who's advising us on how to curb inflation. Now I am confused.
This is obviously the start of a government campaign to soften the public up, with ominous warnings of how a better deal for low paid workers will be the death knoll of the 26-County economy. Ironically enough, this also comes in the same week as a Harvard Economic study published findings that the same economy is the fifth most competitive economy in the world. That economy's skilled, capable, world-renowned workforce is now being told that they cannot be afforded any big share in that economic growth. To extend the benefits to them would spiral the inflation which is already eating into their wages, they are being told. But why should they be surprised? Workers have always been the first to be told to tighten their belts.
Peter McLoone of IMPACT, one of Ireland's largest trade unions, which has backed successive partnership pay and taxation deals, has this week called for a pay increase above the 5.5% annual increase agreed by his union in the Programme for Prosperity and Fairness (PPF). The Economic and Social Research Institute (ESRI) are set to revise their forecast on inflationary growth to 5.3% for this year and 3.6% for 2001. This will far exceed the 2.5% annual rise on which the PPF's terms had been predicated in Febuary.
There is little provision being made by the government for either prosperity or fairness when it comes to those on low and middle incomes. But when you're used to spending your holliers sunning yourself at luxurious foreign villas belonging to millionaire buddies, all that low pay stuff can seem like a million miles away.
So Wim Duisenberg, President of the European Central Bank (ECB), has told those of us living in the 26 Counties that we need to avoid a `giveaway budget'. So what?
Duisenberg's warning came as the Dublin government initiated another of its good cop-bad cop routines, with Bertie `man-of-the-people' Ahern playing the nice guy who wants to help everyone and Mary `don't call me babe' Harney warning Bertie that he has to help her rich pals first. The Taoiseach boosts his image as the soft-touch Taoiseach, while Harney keeps in with that small (and dwindling) group of financiers still willing to back the PDs. Political spin at its most revolting.
Apparently, Ahern had wanted tax-cuts to benefit the lower paid, but following the Duisenberg warning, his seemingly simple and fickle mind has changed. Now, it appears, inflation will be limiting the fiscal scope for tax reductions.
The old way for tackling inflationary problems was to alter the interest rates and exchange rate employed by the state. However, this responsibility has been taken out of the hands of the too fickle Taoiseach and given to the ECB. And who's the head of the ECB? None other than our friend Wim Duisenberg - who's advising us on how to curb inflation. Now I am confused.
This is obviously the start of a government campaign to soften the public up, with ominous warnings of how a better deal for low paid workers will be the death knoll of the 26-County economy. Ironically enough, this also comes in the same week as a Harvard Economic study published findings that the same economy is the fifth most competitive economy in the world. That economy's skilled, capable, world-renowned workforce is now being told that they cannot be afforded any big share in that economic growth. To extend the benefits to them would spiral the inflation which is already eating into their wages, they are being told. But why should they be surprised? Workers have always been the first to be told to tighten their belts.
Peter McLoone of IMPACT, one of Ireland's largest trade unions, which has backed successive partnership pay and taxation deals, has this week called for a pay increase above the 5.5% annual increase agreed by his union in the Programme for Prosperity and Fairness (PPF). The Economic and Social Research Institute (ESRI) are set to revise their forecast on inflationary growth to 5.3% for this year and 3.6% for 2001. This will far exceed the 2.5% annual rise on which the PPF's terms had been predicated in Febuary.
There is little provision being made by the government for either prosperity or fairness when it comes to those on low and middle incomes. But when you're used to spending your holliers sunning yourself at luxurious foreign villas belonging to millionaire buddies, all that low pay stuff can seem like a million miles away.