Analysis > Sean Whelan

The Governor writes…

You wouldn’t expect the Governor of the Central Bank to recommend the Government does something wacky in the Budget, and in his pre-budget letter to the Minister for Finance, the governor doesn’t disappoint. His key recommendations are, firstly a long-term need to reduce debt well below the 60% limit set by the Maastricht Treaty and, secondly any budget-day help for first time buyers should not make things worse. The Governor would like to see long-term budgetary targets that can “act …

Mario Draghi is a socialist (sort of)

OK, as an effort at click-bait this headline may not the most convincing, but now that I’ve got your attention, let me update you on this week’s Brussels Economic Forum (which definitely ain’t a click-bait term!), where investment was a recurring theme. The boss of the European Central Bank was able to step away from the usual lines about cross checks and five-year inflation expectations to look at some of the wider issues confronting the European Economy. In particular things …

Yahoo – it’s Fiscal Space time again!

So the economy is growing like topsy, the taxes are rolling in, the deficit and the government debt are falling rapidly, as is unemployment.  What could possibly go wrong? Well plenty, says the Fiscal Council – from Brexit, to a changed corporate tax regime in America, to simple lower growth, all of which could severely knock  what is still a rather delicate set of government accounts.  (They are too polite to mention the ever present risk of dumb-ass politicians making …

The European Commission recommends…

We are now halfway through the budget-making process for 2017, the point at which the European Commission sends out Country-specific Recommendations to member states – key issues to be dealt with in the national budget plans that are to be published in mid October. They boil down to calls to broaden the tax base, prioritise capital spending on transport, water services and housing, tweak social welfare policy to concentrate on the high number of “low work intensity households” in Ireland, …

That €6.75 billion spending increase – a back-of-the envelope first take

The leaked draft programme for government says the new government will spend €6.75 billion more on services by 2021 than it plans to spend this year. What does this mean? Are they talking about the dreaded fiscal space? Michael Noonan told the Dáil last week that the fiscal space has gone up from €8.6 billion before the election, to somewhere north of €10 billion now. Taking the draft programmes 2:1 spending to tax cuts ratio suggests €3.4 billion in tax …

Scary movie – Brussels style

Holy Moly – the latest economic forecast from the European Commission is one of the scariest I have seen from any major forecaster for some time. You want me to be more precise – OK, what about 2009? That’s the last time the global economy was growing as slowly as it is now. As for the risk of something bad blowing up, like it did back then, well have a look at this line from Marco Buti, the top Eurocrat …

Screaming in fiscal space

Nobody outside Leinster house seemed to be too bothered by the prospect of the next government (or governments – however many it takes to reach the end of the forecast period in 2021) having an extra €2bn to play with. But it seems they do, thanks to a largely expected expansion of our old friend, the fiscal space. The Department of Finance published a “slimline” version of the Stability Programme Update on Tuesday night, giving the expected update on its …

The public finances without a Government

By Sean Whelan, Economics Correspondent By the end of this week, the government is supposed to have sent the European Commission a document called the ‘Stability Programme Update’. Although this requirement has been around for some two decades, it is only with the onset of the financial crisis that the wider public started to pay it much attention. In fact the SPU, as it is know, is probably the most important budget document apart from the Budget itself. 

The complex cost of scrapping Irish Water

Some commentators have said that scrapping Irish Water could cost €7 billion. Irish Water estimates that over the next five years, scrapping domestic water charges would cost it €1.6 billion in revenue foregone. Abolishing the utility company structure puts at risk planned reductions in operating costs of another €1.6 billion over the next five years. This sum has been agreed by Irish Water’s regulator, so they will be held to account on this. This cost reduction is driven by the …

The hat-trick – three EPP prime ministers struggle in post-bailout elections

So it’s a hat trick – three in a row. First Portugal, then Spain, now Ireland. Three post-bailout countries went to the polls over the past five months. All were led by prime ministers from the European Peoples Party (EPP), the mainstream conservative block in Europe. All three emerged from their elections as the biggest party in parliament. None of them could put together a new government. And nor could the opposition (with the heavily qualified exception of Portugal – …

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