New figures show further decline in the ‘Real Economy’
Friday 1 October 2010Real danger that cutting the budget deficit over next four years will drive the economy into a long-term depression
Government should renegotiate longer-term for reducing the deficit
The Mandate Trade Union has today said that the latest retail sales figures show that the ‘real economy’ is shrinking and have warned that this decline cut turn into a long-term depression if the current Government’s approach to cutting the deficit is continued. Mandate represents almost 50,000 workers in the retail trade.
“When motor sales are stripped out, today’s figures issued by the Central Statistics Office show that the volume of retail sales declined by 1.4% in August 2010 when compared with August 2009. When you consider that the country’s GNP shrank by 1.2% in the second quarter of the year, it is clear that the real economy is declining again.
“However, the Government is proposing to shrink the domestic economy even more by cutting up to €4 billion in the next Budget and crossing its fingers that the economy will recover based on export-led growth. However, the markets we mainly rely on for exports are themselves experiencing difficult times and so the prospects of Ireland emerging from the recession based on such growth are not good to say the least,” John Douglas, Mandate General Secretary said.
Mr Douglas explained that if the Government continues to make the deep cuts that they have agreed with Europe, then Mandate expects that the Irish retail sector could become a wasteland of boarded-up shops with thousands of workers – many of whom are young people – being laid off.
“What we do know is that the current Government’s approach of cutting the budget deficit over the next four years will deliver more unemployment and less income in the pockets of those on lower and middle incomes. These are the very people who spend nearly all of their incomes in the domestic economy and sustain activity and jobs in the ‘real economy’.
“We now know that our economic difficulties are considerable bigger than when we agreed with Europe to get the Budget deficit down to 3% by 2014. What the Government needs to do is to go to Europe now and negotiate a longer period of time for paying off the deficit. If they don’t they are going to suck the very life out of our economy,” John Douglas concluded.
