ANALYSIS:Framework for a smart Ireland was like a castle in the air yesterday, writes Stephen Collins
THERE WAS an eerie atmosphere in Dublin Castle yesterday for the launch of the Government's plan to boost the economy because it did not deal with the big issue on the minds of everybody there: how is the country going to survive the economic tsunami that is threatening to sweep all before it over the next 12 months?
Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewalis packed with bulleted action points. Many of them may very well contain good ideas which could work in an ideal world to make Ireland the "silicon valley" of Europe as Minister for Communications Eamon Ryan hopes.
The problem is that the plan does not deal with the fact that the economy is shrinking at a frightening and unprecedented rate, unemployment is rising faster than at any time in the history of the State and the public finances have spiralled out of control.
Asked how he proposed to deal with what is turning into the worst economic and financial crisis ever faced by an Government, Taoiseach Brian Cowen kept repeating the mantra that the solution could only be found in the context of social partnership.
"I am sticking with the partnership approach regardless of what the critics may say," Cowen said again and again.
Whether the social partners will now stick by the Taoiseach and make genuine concessions on public sector pay and flexibility that will enable him to get the country's finances under some semblance of control is the big question.
The problem is that with every passing day things are getting dramatically worse and there is simply not time for the traditional negotiating dance that occupies so much of their time.
In the light of yesterday's data from the Central Statistics Office showing just how fast the economy is contracting and today's report from the Economic and Social Research Institute predicting more of the same for next year, the renewal plan seemed very academic.
"We know a hurricane has just started to hit us but instead of battening down the hatches and trying to fight its worst effect we are happily planning next year's holiday to a sunny destination as if nothing is wrong," said one critic at the event.
Another problem with the plan is that the 100 pages of bureaucratic verbiage obscure the potentially good ideas that are lurking there somewhere. The Innovation Fund is one of the few really new ideas but it is a long-term strategy that doesn't deal with how the country will get there.
The Taoiseach spelled out the aim of the plan to make Ireland "the world's leading location for business innovation, a country where there will be a critical mass of companies - both Irish and international - at the forefront of innovation, creating the products and services of tomorrow and well-paid quality employment."
Nobody would argue with the objective but how we get from here to there is the problem and on the immediate front Cowen did not have a whole lot to say.
He did accept there was a real problem, although he attributed the blame to things outside Government control.
"It is important, therefore, to emphasise that today that there are no magic bullets that can allow us to avoid the consequences of the international recession.
"But we refuse simply to weather the perfect storm of negative international economic factors."
The Opposition parties unsurprisingly denounced the plan as woefully inadequate.
Fine Gael deputy leader and finance spokesman Richard Bruton pointed out that it repackaged many activities that were already under way but more fundamentally he accused Cowen of refusing to make any of the difficult decisions that were required to transform the economic situation.
"Old clothes are being put on new hangers with fancy names and the Taoiseach pretends the economy is then made over.
"Rolling out the proposals already passed in the Finance Bill and in the estimates does not constitute a new strategy.
"Tagging on a slew of buzz words to existing policies does not constitute a new strategy either.
"If we had a cent for every buzz word in this report we would have no difficulty recapitalising the banks," he said
Labour's finance spokeswoman Joan Burton was equally dismissive, saying that the plan amounted to "100 pages of stale reheats, leavened with vague aspirations".
She too called for action: "There is no leadership, and little action. Despite the deep crisis in the Irish economy, the Government is, even yet, one report away from a decision."
One of the problems for the Government since Cowen took over the reins in May is that it has consistently appeared to be behind the fast changing economic facts of life.
Its initial response to the emerging downturn in July was too timid and its subsequent decision to pay the national pay round on September 1st was a serious error of judgment for which it has paid a heavy price.
The next mistake was to bring forward the 2009 Budget to October. It may well have been justified in having a mini-budget in October with revenue-raising measures for the rest of the year but producing next year's Budget before the current year's financial position was clear was a big mistake.
Now we have had an economic renewal plan before decisions are taken on the urgently required measures to deal with the public finances.
The long-overdue decision to defer the next round of the national pay deal will ultimately have to be taken, with or without the agreement of the trade unions.
The difficulty is that things are so bad the ESRI is suggesting that pay cuts will have to be looked at.
That again raises the question why the 2.5 per cent pay round was forked out in September.
The decisive action that everybody knows is inevitable cannot be postponed much longer. The Government is clearly hoping that the scale of the crisis will prompt a consensus but, if that does not happen quickly, the Taoiseach cannot afford to postpone decisive leadership much longer.
Stephen Collins is Political Editor of The Irish Times