The budget documents are now online. The server is clearly busy but I just downloaded all the documents.
Budget Documents
- Post author By Karl Whelan
- Post date December 7, 2010
- Categories In Fiscal Policy
- Tags budget
- 38 Comments on Budget Documents
Author: Karl Whelan
Off we go.
After claiming on RTE radio last weekend that the guarantee decision was taken “on the day before. It was a Sunday. We had a Cabinet meeting. We’d gone through it in quite a bit of detail” John Gormley is now stating that this was not, in fact, the case. Today’s Irish Times reports:
Mr Gormley said in a statement that a meeting of the Government was held on Sunday, September 28th, to discuss the budget for 2009.
“At the end of this meeting, the Minister for Finance briefed colleagues on problems experienced by Irish banks in context of international developments; that contingency arrangements were being prepared; that the situation was being closely monitored, and that the focus was on banking system stability.
“While no formal decision was taken, arising from the briefing there was a clear understanding some Government action would have to be taken if the situation deteriorated,” Mr Gormley said.
So, we’ve gone from “you couldn’t just make a decision on the spur of the moment. You’d have to discuss it for days in advance. Of course, not. No, you just can’t do it like that.” to “some action had to be taken” with the specific action that was taken being done as follows:
The further deterioration in the situation on that Monday led on to the discussions and decision on the night of Monday and Tuesday, September 29th and September 30th, 2008.
i.e. they took the decision when Gormley was in bed.
Personally, I think Gormley would be better off sticking with “Wasn’t my idea, I was in bed” as a political strategy. More seriously, for the circumstances of such a momentous decision to be so murky more than two years afterwards is highly unsatisfactory.
Before the snow hit, I gave a pre-budget presentation (pretty similar to my UCD presentation from today, though with some additional material on the banks) at a Labour Party pre-budget event. That presentation and three others are available here. Marie Sherlock from SIPTU and John Martin from OECD gave interesting presentations on labour market and training issues and Michael Collins from TCD gave a presentation on tax breaks.
I did a short pre-budget presentation today at UCD. Here are the slides. One point I emphasised is whether the level of front-loading of adjustment in the four-year plan agreed with the EU and IMF makes sense.
Up until the past few weeks, it was reasonable to argue that a significant front-loading was necessary (if not sufficient) to regain access to the sovereign bond market. However, now that our banking problems and the ECB have caught up with us and access to the sovereign bond market is not an issue for the next few years, I’m struggling to understand the logic for the extent of front-loading in the current plan (€6 bilion in adjustments in 2011, €3.6 billion in 2012, €3.1 billion in 2013 and 2014).
The economy is still in poor shape, so I’m not sure what the current argument is for further undermining it with such a front-loaded adjustment. As I speculated in the talk, perhaps the EU wanted to lock in as much adjustment as possible with the current government because comittments beyond the 2011 budget were most likely going to be open to negotiations with the next government.