A Sunday Independent / Quantum Research poll has shown that 64 percent of Irish people believe it is “inevitable” that Ireland will need help from the International Monetary Fund by the end of 2010.
Colm McCarthy, an economics lecturer at University College Dublin, agrees that if the December budget “fails to convince the financial markets” the “the game is up” the IMF will step in. In the Sunday Independent he describes a “scary scenario” whereby the IMF could move in and take over the running of Ireland by February.
McCarthy said that if the budget on December 7 does not convince the financial markets the Irish Government will not be able to finance itself “which means an IMF/European bail-out and economic policy dictated from outside the country for the first time since the State was founded".
He says that Ireland’s cash reserves will run low unless it re-enters the bond market with up to $6.95 billion.
The UCD lecturer headed a group who recommended saving of up to $7.3 billion in July 2009. Most of the recommendations were not implemented.
Yesterday, former Fine Gael leader, Garret FitzGerald, said, “It seems to me that in the present critical situation, the national interest would not be served by a Dail defeat of the Budget -- whatever its contents may be.”
The Irish Government denied the rumors that Minister for Finance Brian Lenihan might move the date for the budget forward. It was thought he would change the date to make it closer to the publications date of the four-year budgetary plan, which will be submitted to the European Commission. The Government also said that they were confident the budget would be passed with no defections from Fianna Fail, the Greens or by independent TDs.
McCarthy said the four-year-plan will be critical but that the budget will be even more important. He said that the priority will be to reduce the projected amount of borrowing for 2011 and to hope that Ireland’s reentry into the bond market goes well.
"Those who object to a tough Budget on the grounds that it will weaken an already weak economy are whistling in the wind unless they can identify a less deflationary option,” he said.
"It is not that we are living beyond our means: we are living beyond the willingness of lenders to lend."
However, the people of Ireland remain hopelessly pessimistic about the economy. In the Sunday Independent survey they were asked if there was a chance of economic growth and job creation over the next four years. Sixty-eight percent said now while only 32 percent said yes.
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