Begg dismisses claims of economic recovery as 'guff'

A LEADING trade unionist yesterday dismissed as “guff” claims that the economy was on the road to recovery.

Recent figures showing slowdowns in the rate of inflation, stabilised unemployment and increased consumer spending, along with an EU prediction that the Irish economy could grow by 3 per cent next year, have sparked hopes that the recession has bottomed out.

However, David Begg, general secretary of the Irish Congress of Trade Unions (Ictu), yesterday said he did not believe it was possible for a recovery to kick in so quickly after such a sharp recession. “All this talk recently of green shoots of recovery; an awful lot of that is guff,” he said.

Mr Begg argued that taking into account the damage to the Republic’s tax base and a near 20 per cent fall in gross national product (GNP), it was very difficult to see how the economy was going to start growing again.

“Even if we managed to grow exports, domestic demand is going to be very, very depressed, and domestic demand accounts for about 60 per cent of the economy.”

He said recent comments by analysts in overseas media indicated they did not believe that the Republic and other peripheral EU countries would emerge from recession any time soon.

Mr Begg was speaking at the launch of Ictu’s submission to an investigation into the causes of the Republic’s financial crisis by banking experts Klaus Regling and Max Watson.

Ictu representatives recently met both men, who are looking at the broad policies which contributed to the crisis.

Mr Begg said the talks left Ictu concerned that there was a misconception that it supported various Government policies which had created the bubble in the first place.

The submission pulls together various statements and papers produced by Ictu showing that the organisation, Mr Begg and its economist, Paul Sweeney, opposed tax cuts and growth for growth’s sake, and clashed with Government figures, including former minister for finance Charlie McCreevy, over key economic policies.

Mr Regling and Mr Watson have experience with bodies such as the IMF and EU Commission. They have been working since February, and are due to report to the Government next month.