Ireland has already embarked on two rounds of deep spending cuts and they have *NOT* worked. Ireland's Tiger economy first collapsed spectacularly in December 2008, incidentally, not long after the British chancellor George Osborne praised Ireland to the hilt and went over there to "listen and learn".
In 2008 Brian Lenihan, the Irish minister for finance, introduced a budget so harsh that it was described as "masochistic" by the Financial Times.
Lenihan said he had no choice. But did he? Since then Lenihan has cut the Irish economy still further and its banks were on the verge of collapse and had to be bailed out by Europe and the IMF, Britain stumping up at least £10 billion of the rescue package. Today Ireland has announced further cuts.
There are several warnings in Ireland's economy not least one warning that it is just as risky to become reliant on the construction industry to get out of recession and out of trouble as it is to rely on the financial sector. So for the UK, last month's set of slightly better (although still bad) economic figures that Osborne and Cameron were crowing about, contain a serious warning because those figures were based on the construction industry fairing slightly better than expected. The Irish construction sector, which had swollen to a fifth of their total economy on the back of cheap credit collapsed and Ireland's banks have been surviving on taxpayer handouts and state guarantees. It will be folly for this country to go from reliance on the financial sector to reliance on the building sector, not least, because I am reliably informed that the building sector is now slowing at an alarming rate.
The deepest cuts in Ireland have not worked, so why today have they announced still further deep cuts plus a VAT rise? It doesn't make sense. Irish Businesses are going bankrupt, unemployment is soaring, tax revenues are down, benefit payments (despite savage cuts) are rising - Cuts Have NOT worked, so why have the Irish today announced a rise in VAT? How is this regressive tax going to help the Irish economy recover? The Irish economy has stalled, how is taking more money out of it going to help growth?
This is the exact same actions as George Osborne is taking in this country and just has this has not worked in Ireland, these cuts will NOT work in Britain. Why is the British government sitting back and watching Ireland go down the pan because it took the wrong action over making severe cuts and doing exactly the same as them?
What happens when this latest round of cuts do not work? What happens when there is simply no further cuts to be made and the Irish economy still has not recovered?
How can George Osborne say on one hand that it is right to bail the Irish banks out, when he and David Cameron voted AGAINST bailing British banks out when the Labour government had to to it?
Ironically, Cameron, Osborne, Clegg, Cable and Alexander have made several intimations that Britain was going to same way as Greece, this was always blatantly absurd and they knew it, they used this to lie their way into power and they used it to scare the British people into voting for them and they used to implement the ideological cuts that they would have made, whether we had a deficit or not.
We know these cuts are ideological, because Cameron has admitted that some of the most savage cuts in public services and welfare will never again be reinstated, even the Irish prime minister is promising to reinstate their cut services etc.
When is this government going to come clean and apologise to the Labour party for saying they were responsible for global financial recession? Unless they are also going to blame Labour for the recession in Ireland?
This government needs to stop blaming labour for this mess and blame the real people that caused it, the same people that caused it in Ireland, Portugal, Spain and Greece - the bankers!
Yet this government still keeps on trying to blame labour for this situation.
If Osborne, Cameron and Clegg do not put a halt on these spending cuts which will destroy growth we will be in exactly the same position.
Equally one of the biggest absurdities is that Ireland far from being a good neighbour that needs a helping hand, has been and incredibly BAD neighbour, they have their corporation tax set at 12.5% and they are going to be allowed to keep it there, how is the UK going to compete with them?
Ireland has this low tax band and has no intention of raising it and this makes it an uneven playing field and even with this low tax, they still could not prevent themselves from a double dip recession and Ireland just a few days before they entered the double dip, said they would not be entering a double dip.