PUBLIC SPENDING FROZEN until 2014 – consequences
The average interest rate paid on our debt in 2010 is 4.3%. The public sector debt costs every employed person in the country €1,000 next year in interest payments alone. The banks in Ireland have €375 billion lent to Irish private sector more than half of which is in property mortgages or in property related dealings.
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Fine Gael wants government to cut public spending by €4 billion immediately. He argues that the EU Commission is forcing us to cut back too fast which will remove demand from the economy and will make unemployment now at 420,000 people much worse. He condemns the Commission for poor regulation of the Eurozone especially here in Ireland where they predicted that our economy would grow by 3.5% whereas we contracted by around 10%. The €4 billion cut in spending next year will cut 2% off economic activity. We need an economic stimulus to get gthe economy moving. That will mean action on bank lending and a bit of government muscle.