Monday, March 7, 2011

The new Irish coalition agrees to ease the fiscal adjustment

The Fine Gael (center right) and the Labour Party (center-left) agreed early Sunday to form a "government of national healing" in Ireland to tackle what they described as "the darkest hour in the history of our state independent. " After forcing the collapse of the traditionally hegemonic Fianna Fáil, the victors of the elections on March 25 bases submitted yesterday to a government program that keeps adjusting the hardness of this year, but it smooths over the medium term by delaying from 2014 to 2015 objective of reducing the public deficit to 3%.

The leader of Fine Gael and future taoiseach (prime minister), Enda Kenny and Labour leader, Eamon Gilmore, mid-afternoon got support from their bases to the coalition agreement, although contrary voices were heard especially in the debate held Labour more than 1,000 supporters. In the Government's program emphasizes the desire of both parties to renegotiate the terms of the rescue package negotiated last year by Ireland with the European Union and the International Monetary Fund.

But behind the powerful nationalist rhetoric, essentially only conceals the request to comply with low interest rates to which the country pays the money that comes from international institutions. They offer the argument that the saving of public money which would benefit Ireland may be used to generate employment.

The two parties, which ruled in coalition four times in the past despite their divergent ideological positions, have also agreed on a platform of political reform in which he outlines the proposal that the Irish referendum vote a proposal to eliminate the Senate. In the same vein on the expenditure generated by the political apparatus, but with less clarity on the measures to take, they wished to study a reduction in the number of component members of the Dail, or lower house, reducing the salaries of deputies, expenses and pensions.

But is the economy that makes up the backbone of the government program. Both sides have made concessions on their platforms. There will be a further cut public spending 3,000 million in 2012, but not the 9,000 million Fine Gael wanted. The fiscal consolidation should not be based on a balance between tax rises and spending cuts.

And it will cut between 23,000 and 28,000 government jobs in three years through voluntary redundancies. The Ministry of Finance lop into two: a ministry of budget and taxes and one that will handle the reform of public services and expenditure trends. The two ministers, along with two others, one from each party, will form an economic council which will act as a super made in the Cabinet and will have supreme power over economic policy and will not have to respond even to the prime minister.

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