RTE news: Government-led economic stimulus is a “good” idea, and Zombys stimulus is “the best of all possible worlds”.
The former finance minister was responding to a question about the government’s stimulus plan which has seen its value rise to €100 billion ($109.7 billion) over three years.
“The stimulus is the best of the best.
It’s not even a good plan at this stage.
But I will be happy to have the best government-led stimulus package in history,” he said.
“If you want to start a recession, you have to be spending the money you’ve got.
If you have a stimulus plan, it will help to put you on the road to recovery.”
In a joint statement with the European Central Bank, the government said it was creating jobs and improving productivity through economic policies that included a freeze on VAT increases and tax rises, as well as higher minimum wage, a reduction in unemployment benefits, a freeze in the number of public sector job losses and a reduction to corporate taxes.
The government also said it would invest in infrastructure and jobs creation, including by expanding the National Highways System and investing in green and renewable energy.
“In our view, this is the right and appropriate time to announce that we have agreed to the first of two rounds of economic stimulus, which will be announced by the end of the year,” the government added.
A report from the OECD last month said that the stimulus package would lead to a 0.3 percentage point increase in GDP over the next three years, but would also lead to the loss of 2.6 million jobs, and could have a negative impact on public finances, as the recovery would take longer than expected.