Think-tank slams 'party poopers' for prolonging austerity, says Budget can be easier

The Government is being told that it can achieve economic targets with an austerity budget of just €800m, and that it could put in place a €1bn economic stimulus to create thousands of jobs.

The advice from the Nevin Economic Research Institute flies in the face of the Troika and others who say a €2bn correction is needed.

The institute says those bodies are "party poopers" by being ultra cautious.

Dr Tom McDonnell from NERI said the Government should not go ahead with the planned austerity measures.

"A €2bn adjustment goes too far," he said. "That would be prolonging austerity (and) doing unnecessary damage to the economy.

"the evidence and our analysis suggests that goes much too far…To pursue the €2bn adjustment is doing unnecessary damage to the labour market."

He added that changing the threshold on the marginal rate of income tax would not be effective in boosting demand.

* The Nevin Economic Research Institute is supported by a number of unions affiliated to the Irish Congress of Trade Unions.

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