TAOISEACH'S REACTION:TAOISEACH BRIAN Cowen has defended the Government's recent economic decisions and has struck out at those who say the bank recapitalisation is motivated by "a sectional interest priority by Government".
In Mullingar yesterday he said the €7 billion injection from the pension reserve fund, where it currently earns 2 per cent, into a shareholding in the two main banks, is an investment for the taxpayer. Mr Cowen insisted the injection was not a bailout and said it will earn a return of 8 per cent per year.
However, he added that “there are many who seek to portray that as in some way, some sort of a sectional interest priority by Government. Nothing could be further from the truth.”
He said this was being done because there aren’t options, not because it is a benefit to some sector of the community.
Without that recapitalisation “we would put at risk the very stability of the system, which is a pre-requisite for the wider economy to operate”, he warned.
“Every decision that Government has taken is based on our assessment of what is in the public interest, what is in the interest of the economy at this difficult time.”
He said the public service pension levy is not in any way meant as a targeting to any particular sector of the community. He said the State was ensuring that, as a public service employer of more than 370,000 workers who do “a wonderful job, an excellent job”, the pay and pension commitments, which are a considerable draw on resources, can be met in an affordable way.
The cuts are not merely to achieve an internal budgetary efficiency but are important, he said, for external confidence, for those who are providing the borrowings on international markets.
“We have to show we have a capacity and a willingness and display the political will to manage our own affairs properly.”
He drew a round of applause from business people when he said he had directed the Minster for Energy and Natural Resources and the energy regulator to bring forward a 10-15 per cent cut in energy prices, which can be implemented in the next month or two.
This will bring about an improvement for those who see energy prices as a major factor in the competitiveness of Irish industry.
He has also told the Ministers for Social Welfare, Education and Enterprise and Employment to pool together the funds that they have in terms of training, and resources that will be available for social welfare in the event of higher unemployment.
The Taoiseach reiterated the Government’s determination to alleviate the situation where one- third of day-to-day spending is borrowed, saying that the onus is on them to ensure a “sustainable basis on which to provide services and protect those who are most vulnerable”.
“Clearly we would not be thanked if we did not take the necessary decisions to bring our public finances back into order.”