Mantra of economic utopia loses its gloss

It is said that an adviser to the Taoiseach is conducting an "issues audit" among backbench TDs in an effort to inject new life into the Government and avoid any further self-inflicted electoral handicaps. Maybe the Minister for Finance, Mr McCreevy, should do the same, only his adviser might be better used in visiting the CSO, the Central Bank, the ECB and OPEC.

That way, he might avoid or at least have more time to try to spin a way around some of the pronouncements and actions of these groups which continue to take the gloss off his mantra of economic utopia.

The latest blow came from the Central Bank, which warned that contrary to the confident assertions of the Department of the Finance and various domestic economists, inflation was set to remain at a stubbornly high 4 per cent next year. And that assumes that the euro will strengthen and oil prices fall! It also takes for granted that wages will stay within the guidelines set in the Programme for Prosperity and Fairness and that the upcoming Budget will be "neutral".

Given that the PPF was negotiated on the basis of a Government inflation projection of 2.25 per cent in 2001 (close to half the figure now being suggested by the Bank) and that the implementation of its provisions would militate against a neutral Budget, the Bank looks to be preparing us all for more gloom ahead.