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Is this much close enough to too much when it comes to austerity? December 18, 2012

Posted by WorldbyStorm in Economy.
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Well well well. Perhaps we’re finally seeing the functional limits of austerity come into view now, at least in the eyes of some external observers.

The International Monetary Fund said Ireland could delay some of the budget cuts required under its bailout program if the country’s economy grows more slowly than expected next year.

The Washington-based lender, one of a trio overseeing Dublin’s 85 billion euro ($112 billion) bailout, said Ireland had so far shown “steadfast policy implementation” with the conditions of its loan program, despite slower growth this year.

“If next year’s growth were to disappoint, any additional fiscal consolidation should be deferred to 2015 to protect the recovery,” Lipton said in a statement.

Hat tip to Dr FIVE on politicalworld.

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1. doctorfive - December 18, 2012

That’s sure to be a small if too.

Full statement here http://www.imf.org/external/np/sec/pr/2012/pr12491.html

Means very little without the other two on board of course but at least the IMF are now to the left of the Labour Party.

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WorldbyStorm - December 18, 2012

Agree entirely, it has limited currency, and the IMF has always tended to a slightly less harsh line, yet it is useful ammunition in terms of a breach inthe orthodox consensus. Moreover as you say the IMF is now left of the LP. Useful.

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EamonnCork - December 18, 2012

Good point Doctorfive. We can presumably expect a statement from Rabbitte lambasting the IMF as a bunch of unrealistic bleeding hearts who haven’t the guts to take the tough decisions.

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2. CL - December 18, 2012

“To avoid high unemployment becoming more structural, the authorities are intensifying engagement with unemployed persons, reforming further education, and revamping housing supports.”-This is the IMF’s only reference to unemployment, and it doesn’t spell out how these three measures will prevent ‘high unemployment becoming more structural’
‘All program targets have been met’ says the report. Clearly an unemployment rate of 15% is compatible with meeting the program’s targets.
Could someone explain how ‘revamping housing support’ will prevent unemployment ‘becoming more structural’.
and the ‘authorities’ are going to intensify ‘engagement with unemployed persons’. What does that mean?

http://www.imf.org/external/np/sec/pr/2012/pr12491.htm

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3. greengoddess2 - December 18, 2012

It is a major breach of Troija orthodoxy. The idea of it being to the left of the LP…..is

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eamonncork - December 18, 2012

True is the word I think you’re searching for.

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4. greengoddess2 - December 18, 2012

No. The IMF is pragmatic. Not ideological.

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LeftAtTheCross - December 18, 2012

Ah now here GG, that’s just nonsense. Along the lines of technocracy being above politics. Nothing is without associated ideology. Your comments here are usually more realistic than that.

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5. greengoddess2 - December 18, 2012

Sorry should have explained. I regard right wing ideology as mere pragmatism.

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LeftAtTheCross - December 18, 2012

As in ‘whatever it takes’? Neoliberal orthodoxy dressed up as post-ideological politics.

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6. greengoddess2 - December 18, 2012

😨I didn’t say I approved !

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LeftAtTheCross - December 18, 2012

Apologies GG, I didn’t mean to suggest that either. I was recalling your comment a few weeks ago that there were no red line issues for the PLP leadership and that everything was a case of ‘whatever it takes’, or maybe you said ‘whatever works’.

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7. greengoddess2 - December 18, 2012

……not that it makes any difference in the scheme of things. After all am not in ECM ctee. Funny thing. Everyone knows who I am but not the other way around. You could all be dangerous revolutionaries.no?
Have to get on flight.

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LeftAtTheCross - December 18, 2012

We’re all dangerous revolutionaries alright, yep, that’s us.

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Joe - December 18, 2012

:). You’ll have to get your ear pierced and walk with us under the CLR banner at the next protest GG.

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eamonncork - December 19, 2012

I’m Spartacus.

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8. sonofstan - December 18, 2012

A relatively senior civil servant of my acquaintance told me a fair while back that the IMF were definitely the easiest bit of the Troika to deal with – the EU/ ECB bits were all in the grip of ideology, whereas the IMF, having been around a bit longer, and having learned a few things, were surprisingly flexible.

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doctorfive - December 18, 2012

Much of it is good cop, bad cop imo

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sonofstan - December 18, 2012

Could be. But there might be some truth in the notion of institutional wisdom of a kind having slowly replaced dogmatism in the IMF, whereas the EU/ ECB are still relatively new to this.

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CMK - December 18, 2012

Is there any evidence of the IMF softening towards other countries who have ‘benefitted’ from their intervention? For example, in Europe there’s Latvia and Hungary who have been bailed out by the IMF alone rather than the Troika proper. Also, has the IMF softened towards developing nations? I don’t hear of much evidence for the latter proposition. Could it be the case that an excessively harsh approach might be seen, within the IMF, as not entirely appropriate for a still relatively advanced Western European democracy. But that that harshness might be entirely appropriate for a sub-Saharan state struggling to keep up payments on its IMF loans? Is there a double standard at work in how the IMF deal with debtor states? Or is there the eternal Irish desire to take comfort in even the slightest manifestation of regard displayed towards us by the powerful. I’ve just completed Gene Kerrigan’s ‘The Big Lie’ (a cracking book, well recommended for Christmas) and there is a scene described in it where soon after Ireland’s accession to the EEC a then minister, Jim Tunney, seems so bowled over by the experience that he asked for the autograph of some obscure Italian European Commissioner; that’s a classic example of what I’m talking about. There’s a clutching at straws element to the whole ‘ah, at least the IMF are thinking of us’ angle which, I agree with doctorfive, fails to take into account their role as ‘good cop’ in the whole process. They want their money back, and structural adjustement implemented for the Irish economy and society, just as much as the EU/ECB. They may be a little more PR conscious but no less determined to get their way.

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LeftAtTheCross - December 18, 2012

Admit it CMK, you’re been influenced there in your assessment of Jim Tunney by David McWilliams’ “The Good Room”, haven’t you. That must be grounds for summary dismissal from the SP, no??

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9. CL - December 18, 2012

The IMF is recognizing that taking too much out of the economy depresses aggregate demand and impedes growth, and if pushed too far may jeopardize the massive transfer of wealth from the Irish working class to international capital.
This no more puts the IMF on the ‘left’ than conservative economists in the U.S. who are worried about the depressing effects of the so-called ‘fiscal cliff’.

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10. ivorthorneor - December 18, 2012

GUBU.

Pigs are flying.

If there is anyone left in Labour who has any ideas about being a socialist, I hope they take this as a wake up call. Gilmore and co. are endorsing austerity policies that even the IMF find questionable.

I remember back in the day, the right wing Newstalk/Sindo pro-business voices were talking about how if the IMF came along, we’d all be sorry. The IMF were going to cut the wages of the bloated public sector in half and abolish the minimum wage.

Now the IMF are the lesser of the many evils that influence Irish politics – and that includes the PLP.

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11. CL - December 19, 2012

‘If next years growth were to disappoint, any additional fiscal consolidation should be deferred to 2015 to protect the recovery,” Mr Lipton said in a statement.
Mr.Kenny ‘ noted the IMF recommendation that there be no supplementary budget until 2015, if that be the case.’

Kenny is interpreting Lipton’s statement re
‘additional fiscal consolidation’ as meaning that there should be no ‘supplementary budget’ until 2015.
Presumably any cuts already scheduled for 2014 would just go ahead.

http://www.irishtimes.com/newspaper/breaking/2012/1218/breaking5.html

Mr. Lipton was Jeffrey Sachs partner in devising the disastrous economic policy for Russia after the fall of communism. The IMF is attempting to apply the same retrogressive economic philosophy in Ireland.

http://monthlyreview.org/2000/02/01/the-necessity-of-gangster-capitalism

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12. doctorfive - December 19, 2012

gone to the left of Fine Gael now as well

http://www.independent.ie/business/irish/imf-criticises-michael-noonans-budget-for-targeting-the-poor-3332206.html

Though Indo spinning it as a choice between the poor or the PS. Will have to check out the report itself

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13. eamonncork - December 19, 2012

I think the heat is coming on the government. This week you’ve had the President of the GAA and the Bishop of Cork attacking the budget, quarters which would normally not make any statement on financial policy. That’s the kind of opposition which will put the wind up any rural Fine Gael TD.
I’m waiting for Enda to respond by pointing out that the Catholic Church didn’t show much compassion when the Spanish Inquisition was operating and that the GAA’s failure to properly finish the 1925 football championship means they’re in no position to criticise the government.

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