Business Hails Tough Fiscal Medicine the Unions Hate

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Byline: Ferghal Blaney Consumer Affairs Correspondent

BUSINESS bosses last night said the tough economic decisions taken in the last budget have helped restore Ireland's tattered reputation in the global economic community.

The Irish Business Employers Confederation is now more optimistic about the state of the country's finances.

In the latest Quarterly Economic Trends survey they revised their economic forecasts upwards. It now predicts that the economy (GDP) will shrink 0.7 per cent in 2010, in contrast to its earlier forecast of 1.6 per cent.

For 2011, it has pushed up its forecast rate of growth from 1.7 to 2.1 per cent.

Ibec director general Danny McCoy said the increased taxes and swingeing public sector pay cuts imposed on the nation's workers by finance minister Brian Lenihan were key to their revised assessment.

He added: 'The harsh corrective action taken in the budget is reestablishing Ireland's credibility in international financial markets.

'The reward for this recognition is tangible. The cost of borrowing for Government debt has reduced and the Government's ability to raise debt has eased.' 'This hard-won credibility must be sustained. Financial markets are ruthless in their pursuit of perceived weaknesses. Our economy remains in the spotlight.

'Any deviation from current economic targets will be punished by higher interest rates and credit restrictions.' However, Ibec warned that strikes and industrial action could threaten any recovery of the economy.

Mr McCoy stressed: 'Trade unions be aware that threats of industrial action gain international notice and could rapidly undo the credibility that has been established. …