IMF states Ireland may target social welfare rates - unjust,, unfair and unnecessary

The IMF's own review of Ireland's situation sets out the goals to be achieved on Government borrowing by 2015. It states that if the current projections are not achieved then "the savings committed will be delivered, if necessary through fallback options in relation to public sector wages and primary social welfare rates". Social Justice Ireland rejects this approach and continues to point out that alternative approaches are available to Government. Reductions in social welfare rates or in the incomes of 'working poor' households are unjust, unfair and unnecessary.

Social Justice Ireland's briefing to the IMF/ECB/EC 'troika' in October 2011 set out an alternative approach which would protect poor and vulnerable people while achieving the reductions in borrowing required by the Bailout in its present form. 

The latest IMF Report acknowledges that problems in the Eurozone are posing a serious threat to Ireland’s efforts to stabilise its debt burden and return to healthy economic growth.

In its report on the Irish economy published December 20, 2011, the IMF cut its forecast for economic growth in Ireland in 2012 from 1.9 per cent to 1 per cent, and said that the downside risks to growth had increased.

The IMF points out that Ireland’s recovery relies heavily on exports, but threats to global growth have escalated in major Irish export markets including the euro area, the UK and the USA. 

The IMF says further support for Ireland would increase the chances of Ireland’s Bailout Agreement being a success which in turn would benefit overall European stability.

Among the options available to help Ireland the IMF suggests medium-term funding for Irish banks from the ECB and temporary equity participation in banks by European partners. The IMF also states that Ireland's debt position would be improved by changing the terms on which money used to recapitalise banks was borrowed.

Social Justice Irelands Briefing to IMF can be accessed here