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IMF proposal to cut wages is hypocritical - Morgan

14 July, 2010

Speaking today after the release of the IMF report on Ireland warned that wages in Ireland must fall further, to support Ireland’s economic recovery, Sinn Féin Spokesperson on Finance and the Economy Arthur Morgan has said that the report is an 'ill-fitting principle of free-market capitalism’ which is ruthless on ordinary people. Deputy Morgan also criticised the hypocrisy of the IMF for making these recommendations when they oversaw the crisis in the first place.

Deputy Morgan said:

“Today’s report is another chapter in the saga for re-instating the free market principles that sees profit triumph over people. It shows once again the dominant market ideology that exists where policy is toothless with bankers and the drivers of the financial collapse, but ruthless with ordinary people.

“Competition does not hinge on wage reductions. Cutting wages, slashing public services and delivering people into poverty will not make Ireland competitive. The mantra that Ireland will not regain competitiveness until the labour costs have been reduced is an ill-fitting principle of free-market capitalism. This ideology has failed us in the past and will fail us again if we subscribe to it.

“This is the IMF that oversaw the financial collapse in this State and who cheer-leaded the Government policies that have led to the economic crisis here. We cannot forget that the IMF are equally as guilty and culpable as Governments and regulators for failing to prevent the economic crisis, and now we are expected to accept their dictat that wages need to fall to support economic recovery. This is ludicrous.

“Deflationary policies, through wage and welfare cuts, are having an adverse effect on the public finances. Engaging in another litany of wage cuts will cripple the domestic economy further. Today’s report shows the hypocrisy of the IMF in relation to Ireland’s economic crisis; they did not intervene to prevent the home-grown crisis, but are prescribing harsh measures to try overcome it.”

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