MINISTER FOR Transport, Tourism and Sport Leo Varadkar has predicted the economy will return to growth this year.
He said it would be “very slow growth”. For the first time in three years, he was starting to see light at the end of the tunnel.
Mr Varadkar said the easing of the EU-IMF bailout terms was a big step in the right direction.
“One of the things we promised to do, if we got elected to power, was to renegotiate the programme.”
Speaking on RTÉ Radio's This Weekprogramme, Mr Varadkar stressed the State's budget deficit was €18 billion, which had very little if anything to do with the debt crisis or banking crisis.
“That is just the mismanagement of the economy that occurred in the last five or six years.
“Even if there was no European crisis, no euro crisis and no banking crisis, we would have to deal with that problem.”
He said he disagreed with the call by Siptu president Jack O’Connor to moderate the austerity programme and use some of the money saved to inject growth into the economy.
“The money that is saved is not money that is going to be given to us. It is money we thought we would have to spend that we now do not have to spend.”
Mr Varadkar said Ireland had signed up to bringing the deficit down to 8.6 per cent of GDP next year, which was still very high.
Failure to do that would mean losing the support of the EU and the IMF, resulting in a requirement to have an €18 billion adjustment in the one go.
That, said the Minister, would be catastrophic for the economy and society as well.
Mr Varadkar said last week’s deal did not mean Ireland would be receiving structural funds again. But, potentially, the European Investment Bank might be more flexible in advancing loans for capital projects and other measures to stimulate the economy.
However, the details would not be worked out until the autumn, he added.
The issue of corporate tax rates was totally off the agenda, he said.
“There is no question that we will be required to, or even consider, increasing our corporation tax rate. That is a big win for Ireland.”
