Greece could learn lessons on tackling their budget deficit from Ireland

As the global economic crisis rages on the spotlight has been turned to our European neighbours in Greece. Some commentators have made comparisons between the situation Ireland faced last year and what is happening now in Greece. Last year Greece’s budget deficit reached 12.7% of GDP and this year they need to borrow over €55 million. The size of the deficit has caused concern amongst those in the Euro area and the Greek government has pledged to raise taxes and introduce a public sector wage freeze. 

However, to put the scale of the challenge Greece faces into some kind of perspective, they are pledging to cut their deficit by over 9% by 2012; we have cut our budget deficit by 5% over the last 12 months and we all know how difficult that has been.

The Irish Government and Finance Minister Brian Lenihan have taken a series of austerity measures in order to bring our public finances under control. These decisions have caused hardship, yet Greece faces far greater challenges. Our commitment to taking firm and decisive action has won plaudits internationally with ECB President Jean Claude Trichet, commentating that 'the decisions taken by the Irish Government have been very impressive'. There is no doubt that our economic credibility has been strengthened and as the Economist said our courage has been rewarded with lower borrowing costs. The Greek Government faces a long and tough road ahead but they could do worse than to look at Ireland as an example of how to address their economic and credibility deficit.

What do you think of the financial situation in Greece?

Niall Collins is TD for Limerick West. Click here to contact you local TD. 

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