Shock news . . . we don’t have to do the €2 billion

Stop the press! We are to be spared the full force of a €2 billion budgetary adjustment in October, says Minister for Public Expenditure Brendan Howlin.

“The economy has grown, the tax revenue has increased, the number of unemployed has fallen. So these are all good auguries, they’re assistances,” he said on his way into Cabinet yesterday.

Howlin and Noonan were there to brief colleagues on their “over-arching” plans for the budget.

Given the positive numbers coming out of the economy, Howlin said the adjustment required to achieve a 3 per cent budget deficit next year would “certainly” not include €2 billion in cuts.

His comments dominated the news flow for much of the morning.

All of which is rather mystifying given we’ve known for some months that the €2 billion figure is dead in the water.

Howlin was merely echoing what’s been repeatedly stated by Noonan and other Ministers for some time now.

The adjustment numbers pledged by the then government way back at the time of the bailout in 2011 have been jettisoned in favour of hitting annual deficit targets.

That said they do service one purpose which the Government appears content to exploit.

In previous eras, governments had to justify their budget adjustments on the basis of how they saw things with no recourse to an outside authority.

Now it can strike something of a caring pose by appearing to resist those nasty austerity hawks in Brussels who want to force feed us more budgetary privation.

All of which is just spin.

In reality, the country is heading into another wrenching round of austerity, whether it is €2 billion or €1 billion, as some hopeful Labour backbenchers have hinted.

By the end of this year, nearly €32 billion in spending cuts and tax increases will have been taken out of the economy since 2008, which equates to 20 per cent of GDP. This makes Ireland’s austerity project one of the most brutal adjustments in modern financial history. Not exactly a cause for celebration.