McGrath alarmed at sharp decline in economy

Fianna Fáil Finance spokesperson Michael McGrath has expressed his alarm at the sharp decline in the economy highlighted in today’s GDP figures.

“These figures paint a dismal picture of an economy that is mired in recession.  We have now had three consecutive quarters of negative growth and the scale of the recession is deepening,” explained Deputy McGrath.

“The government’s policies are contributing to this crisis. During the last quarter consumer spending went back into decline as the property tax began to hit family budgets.

“In addition to this, the failure to force the banks to tackle the mortgage crisis represents a millstone around the economy. People in mortgage difficulty are not being offered genuinely sustainable solutions, and are unable to move on with their lives and become functioning members of the economy. This is having disastrous social and economic consequences. The revised Code of Conduct on Mortgage Arrears does nothing to help distressed borrowers and actually risks prolonging the economic paralysis being caused by the mortgage crisis.

“The government needs to be shaken out of its dangerously complacent claims that we are on a sustained path to recovery.  The government’s Stability Programme Update in April recognises that the domestic economy is being starved of investment, yet it continues to underspend the capital budget. There are only vague aspirations about leveraging public private partnerships and using the national pension reserve fund to fund job supporting projects, but a complete failure to deliver on promises in the areas the government actually has direct control of capital spending.

“The government has also signed up to a disastrous Europe-wide austerity policy, in which countries with the capacity to spend more are cutting their national budgets and prolonging the Europe wide recession. The EU budget is being reduced at a time when the European economy needs a targeted stimulus programme. Yet this government is inexplicably happy to go along with this agenda.

“The government urgently needs to reverse its domestic policy of piling further financial pain on ordinary families.  At European level, we need to champion at the case for policies that will drag the Eurozone out of the slump that it is in.”