McCreevy: Celtic Tiger is dead
The Celtic Tiger economic boom times are dead, Finance Minister Charlie McCreevy announced today.
He said: “The boom is over. Economic growth this year has slowed markedly.
“The latest consensus forecasts are moving towards 2.5% and 3% gross and national product rates respectively this year – and even that may be over-optimistic.”
Mr McCreevy - speaking at a top-level meeting aimed at renewing a national pay agreement between the Government and both sides of industry, initially framed five years ago - warned that there could be a wages pause for public sector workers if their pay expectations were not realistic.
He backed up that message by insisting that there would be no income tax cuts in his pre-Christmas budget.
The minister said Government purse strings were tighter now than they had been when the last Programme for Prosperity and Fairness was signed in 2000, at the height of the so-called Celtic Tiger boom.
And, looking ahead, he said: “The scope for future tax reductions is very limited. I think that is recognised by all sides.”
The last pay agreement gave workers wage rises of about 20% over three years. But Mr McCreevy stressed today: “We have awarded ourselves higher pay rises than any of our European competitors. In doing so, we are in danger of pricing ourselves out of the market.”
He singled out Ireland’s competitiveness as the key to facing the challenging economic climate ahead.
Also present at today’s Dublin Castle negotiations opening were Taoiseach Bertie Ahern and other senior Government figures.
Mr Ahern said the talks involved “trying to achieve consensus” between the Government and the social partners, but also warned that any deal would be conditional on the current state of public finances.
