Ciarán Lynch TD
YOUR LOCAL LABOUR TEAM WORKING FOR YOU Ciarán Lynch TD Constituency Office: 29 St. Patrick’s Mills, Douglas, Cork Tel: 021 4366200 Fax: 021 4366202 Email: ciaran.lynch@oir.ie Web: www.labour.ie/ciaranlynch
A MESSAGE FROM EAMON GILMORE, TÁNAISTE Next month, the government will be announcing both next year’s spending estimates and next year’s Budget. Let’s be clear about one thing. This government will be making decisions that will be tough and painful. This country finds itself in the midst of an economic and financial crisis, and the fact of the matter is that there is no easy way out of it. In making these decisions, the government has often been faced with choosing between the unpalatable and the unacceptable, but make the decisions we must. We have already had to take decisions that none of us ever thought we would have to make, but progress is being made. Our international reputation has vastly improved. Our economy is growing, exports are strong and the public finances have stabilised.
Cllr Michael Ahern
Cllr Ger Gibbons
Cllr Lorraine Kingston
021 4342521 mahern@corkcity.ie
086 2008807 ger_gibbons@corkcity.ie
086 813 8189 lorraine_kingston@corkcity.ie
Cllr Denis O’Flynn
Cllr Paula Desmond
Cllr David O’Byrne
087 2742156 denis_oflynn@corkcity.ie
087 2626048 087 2328946 paula_desmond@hotmail.com wdobyrne@gmail.com
In addition, we have made huge inroads in renegotiating the terms of the bailout deal with the Troika. There is more work to be done, but we will stick at it because we believe that we can continue to make more progress. The last government threw away our national independence. This government is trying to win it back in the fairest possible way. Unfortunately it will mean a difficult few years for every citizen in the country. I believe that if we really want to lay strong foundations for a long-term recovery we need to take decisive steps now. Yes, we are asking for significant sacrifices, but the prize on offer - the recovery of Ireland, is huge.
FIGHTING FOR OUR ECONOMIC SOVEREIGNTY
I thank you for your continued support. Yours sincerely,
Please feel free to contact me on this or any other issue.
http://labr.ie/CiaranLynchFB @CiaranLynchTD 0612
Eamon Gilmore Tánaiste and Leader of the Labour Party eamon.gilmore@oir.ie
IRELAND’S ECONOMIC SITUATION – THE REALITY
KEY LABOUR ACHIEVEMENTS IN GOVERNMENT l Reduced the interest rate on our Troika loans to a value of almost €10 billion, in addition to spreading out the repayment over an additional timeframe.
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l Renegotiated the EU/IMF Memorandum of Understanding as entered into by the previous government which resulted in the Jobs Initiative.
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l Restoration of Minimum wage. l Reduced the pay of the Taoiseach and Ministers. l Introduced new pay ceilings for senior public servants. l Published legislation to significantly reduce future Public Sector pensions costs. l Expected savings of €20 million by rationalising 33 quangos, with a further 15 quangos to be rationalised in 2012. l Plans to reduce the size of the public service which when delivered will save over €2.5 billion, or 15% since 2008. l Major infrastructure programme providing for the goahead of the National Children’s Hospital and 220 schools. l Commencement of Primary Health Care reform.
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QUESTIONS AND ANSWERS ON THE ECONOMY
Irish Government Spending 2011:
€70,500,000,000
Irish Government Tax Revenue 2011:
€51,500,000,000
Government overspending this year:
€19,000,000,000
Expected Total Debt at end of this year: Proposed Budget Cuts to overspending next year:
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STRAIGHT TALK
€164,000,000,000 €3,800,000,000
WHY ARE WE BORROWING MONEY FROM THE TROIKA? We want to re-enter the markets to borrow money in our own right thereby regaining our national sovereignty. The Troika are lending the State €85 billion in the programme.
LET’S PRETEND IT’S A HOUSEHOLD BUDGET Annual household spending: Annual family income: New debt on the credit card this year: Expected balance on credit card at year end: Proposed cuts to household spending next year:
WHO ARE THE TROIKA? Our current management of our affairs is subject to oversight by the troika of the European Commission, the European Central Bank and the International Monetary Fund.
€70,500 €51,500 €19,000 €164,000 €3,800
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IRELAND’S HARSH ECONOMIC SITUATION
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Due to the disastrous mismanagement of our economy by the previous government, we are no longer in control of our own financial affairs. The reality of the situation our country has been put in is as follows: l Our national debt is rising by approximately €900 per second, €75 million a day. l We are required to borrow in excess of €350 million a week from the EU/IMF to pay the day to day expenses of the State, ie paying teachers, nurses, guards, pensioners etc. l It is costing €70.5 billion to run the country. €51.5 billion is coming in through tax returns. l €110 billion is currently being made available from the ECB to our banks at a low interest rate. l Based on current figures, the EU/IMF ‘loan’ requires us to save €3.8 billion in the forthcoming budget, along with further difficult budgets until 2015. These targets are legally binding.
WHY CAN’T WE ‘BURN’ THE BONDHOLDERS? We don’t believe that the State should pay bondholders in Anglo Irish as it is a failed entity. However, this could not be done without the agreement of the Troika, which we did not get. However, there is no question of additional resources over and above that committed by the previous government. “Burn bondholders and run the risk of the house catching fire…” WHY WAS ANGLO BAILED OUT? That is a question best answered by Fianna Fáil. Anglo was guaranteed by the previous Government because it believed it was a bank of systemic importance. The Labour Party alone voted against the Blanket Bank Guarantee in 2008. WHAT ARE PROMISSORY NOTES? A promissory note is a ‘loan of last resort’, effectively an ‘IOU’, meaning the debt is deferred. The promissory notes were signed off by FF but they deferred the interest payment for the first two years, leaving this government to inherit that problem as well. WHAT IS THE TOTAL COST OF THE PROMISSORY NOTES? Assuming the current level of interest, the bonds will cost the state approximately €47.4 billion. WHAT IS THE ON-GOING STRATEGY FROM GOVERNMENT ON PROMISSORY NOTES? A key goal is to seek reduced interest rates on the promissory notes which would save billions. WHY IS A GREEK ‘HAIRCUT’ IS NOT AN OPTION FOR IRELAND? There is no such thing as a painless haircut. Greek’s debt ratio is higher than Ireland’s and the extremely harsh austerity measures have resulted in monthly pensions above €1,000 to be cut by 20%; 30,000 civil servants have been suspended on partial pay; tax free threshold for income tax lowered from €12,000 to €5,000. ARE THERE ARE POSITIVES FOR THE IRISH ECONOMY? Yes. The economy is growing again. GDP increased in the first half of this year. Our exports are strong – up 4% in the first eight months of 2011; the public finances have stabilised and the budget deficit has started to decline; investor confidence has grown and our international reputation has improved. This government is determined to work hard to regain our economic sovereignty and create jobs for our people. We are taking a long-term approach which will have a significant, positive effect on our national debt.