THE NEED for cross-party consensus on the economic challenges facing Ireland was repeatedly stressed by European commissioner for economic and monetary affairs Olli Rehn at a news conference in Dublin last night.
Accompanied by Minister for Finance Brian Lenihan, he said he would be in listening mode at today’s meetings with Opposition parties.
“I want to begin by saying that this is an important visit for me,” Mr Rehn said. Although he met Mr Lenihan regularly in Brussels, he found the “direct exchange of views” with various interests in Dublin “most useful”.
Today he would listen to the “views and concerns” of political parties and social partners.
“My message will be that the commission supports Ireland and its citizens to face these challenges,” he said.
The commission’s task was to conduct “economic and monetary surveillance” of the member states in the context of the stability and growth pact. “Ireland has a long track record of sound fiscal management,” he said. Making the necessary adjustments “requires political direction and calls for political and social dialogue”, Mr Rehn added.
“Ireland has done it before and it can do it again.” The challenges were formidable but the Irish economy had “formidable strengths”.
Recalling that he had written his doctoral thesis on small-state economies in Europe, Mr Rehn said the lesson he had drawn was that, especially in difficult times, “It is to the benefit of the country if there is a cross-party national consensus.”
He added: “In the current situation in Ireland, irrespective of party-political differences which are inherent in democratic politics, it would be a great benefit for Ireland if broad political support for the necessary consolidation measures and structural reforms could emerge and could be developed shortly.”
Asked about negative perceptions of the Irish economy abroad, he said that “it’s always essential that the product is right and then you can do good marketing”.
The commission was working with the Irish Government and “other political forces” and he added: “In the course of this work, we will of course try to correct and misperception.”
He pointed out again that “Ireland has formidable strengths which too easily tend to be forgotten in the public debate in Ireland or outside the country”.
He said that “of course” he was following Irish domestic politics through the media, and the commission office in Dublin also “keeps me briefed on daily basis”.
“I find it very important for Ireland and for its people in the first place that a broad cross-party consensus could develop on the necessary measures of fiscal consolidation and structural reforms.
“That’s the best way to avoid any further costs for the people and overcome the crisis sooner rather than later.”
The best way for Europe to support Ireland was to “endorse convincing measures by the Irish Government and parliament . . . and that’s why I’m here today and tomorrow in Dublin”.
On the issue of structural reforms, he said: “I would actually prefer to first listen to Brian Lenihan.” It was important that there were reforms in the labour market: “It is a work in progress.”
Asked if he would be saying to the Opposition parties this morning that they should support the budget and the four-year plan, he replied: “I will first of all listen to the political leaders and social partners.” He would “outline the European context and the expectations from the EU point of view” in terms of the stability and growth pact.
Asked if he found the four-year plan convincing, he said the plan had still to be published. It was “genuinely a work in progress” and the Government should be given the opportunity to finalise it.
Asked if Europe would take “a more vocal role” in the Irish economic situation if targets were not met, he said: “It’s usually better not to paint the devil to the wall unless you know you can wash it out from there.”
There were certain economic “rules of thumb” which usually tended to speak in favour of relatively more expenditure cuts than revenue increases.
“Ireland has been a low-tax country,” he said, but now it was time to lean towards becoming a “normal tax country” in the European context.
But he would not be drawn as to whether he was including corporation tax in this: “Let’s not get into the details.”
