Minister for Social Protection Joan Burton repeated her view that austerity alone would not lead to economic recovery in the EU.

“As I have said recently in several forums, the EU needs to shift its approach from austerity-only if the union is to recover and, thankfully, I believe that message is now beginning to seep through,” she said.

Ms Burton said protecting core social welfare rates made sense from a social justice perspective. But it also made sense economically, when consumer confidence remained depressed and people were reluctant to spend.

Ms Burton said the €20.3 billion social welfare budget was a crucial injection of cash into the economy.

The troika
Introducing the Social Welfare and Pensions (Miscellaneous Provisions) Bill, the Minister said Ireland had little choice but to observe the conditions of the troika until it was again able to fund itself on the financial markets at reasonable rates.

That meant a further correction in the next budget, with the ratio of taxation measures and expenditure savings still to be determined.

“Again, my department will be expected to play its part,” said Ms Burton.

“But I return to my earlier points about the crucial importance of protecting the most vulnerable and the value of the welfare spend as a Keynesian automatic stabiliser.

“The proceeds of the promissory note deal must be put to the most effective use, to invest in jobs and to give people hope,’’ Ms Burton added.