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Austerity measures are choking potential for economic growth says Sinn Féin

29 June, 2010

Speaking in reaction to the outcomes of the G20 summit where too much emphasis was put on austerity rather than stimulus, and reports that too much austerity is choking off economic recovery in Ireland, Sinn Féin Spokesperson on the Economy Arthur Morgan has said that tightening our belts fiscally will choke economic growth in the long-term. He said that policies being embarked upon by Government equal a self-fulfilling prophecy of deflation and depression for years to come.

Deputy Morgan said:

“The social impact of the deflationary austerity measures being undertaken by this Government will be felt for generations. Unemployment stands at nearly 13% and long term unemployment had doubled in a year to 5.3%.

“The Government cannot afford to wait for the resumption of strong economic growth to begin the process of stimulus, job creation and investment in critical infrastructure. Sinn Féin has been to the fore in advocating that expansion and stimulus is a pre-requisite to long-term sustainable economic growth.

“The Government are intent on tightening the belt of our Budgets, which will have the effect of choking economic recovery. What this State needs are policies that focus on long-term productivity gains and immediate help for those left behind. What this Government need to realise is that you can’t deflate your way out of debt.

“The massive bailout for banks via increasing debts to taxpayers and cuts in Government spending are creating the conditions for a renewed economic crisis in this State. The policies adopted to cover its costs have lead to harsh austerity measures that only deepen the recession, encourage the growth of unemployment, and attack labour and pension rights. We are witnessing a self-fulfilling prophecy of deflation and depression that will inevitably prolong the economic crisis in this State as joblessness and emigration surge.

“Taxes that governments rely on to service their debts have plunged and actually led to wider deficits. Feeding the parasitical bank shareholders and pouting billions of euros into Zombie banks rather than injecting stimulus, as called for by Sinn Féin, is stunting Irish recovery and growth.” ENDS

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