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Spectre of Deflation Could Spell Disaster for Ireland

Date Released: 10 April 2014

Congress General Secretary David Begg has warned that the “spectre of deflation now threatening Europe could spell disaster for Ireland, causing serious job losses, increasing the debt burden and creating a vicious circle of decline.”

Begg was speaking ahead of a major economic conference hosted by Congress, in Dublin’s Mansion House on Friday, 11th April.

The conference ‘A New Course for Better Times’ will focus on the creation of a blueprint for post-Troika Ireland.

Begg said: “Deflation is a potential disaster for heavily-indebted peripheral countries, like Ireland. Last month average European inflation dropped to 0.5 percent. When prices start falling consumer demand collapses and with it goes employment.

“Your debt burden also increases. And if more is needed to repay debt, there is less to spend on goods and services. It is a vicious circle of decline,” he explained.

“We urgently need to see a resumption of robust economic growth for debt sustainability – something we will be discussing at Friday’s conference - but currently there is no strategy for durable growth anywhere in Europe,” Begg said.

“Policy on inflation is not simply a technical issue - it is actually an issue of class bias. The main beneficiaries of extremely low inflation are the very wealthy. Normally they would have to put their wealth to work or see its value eroded. But with low inflation they can afford to hoard cash and avoid risk.

“And without investment jobs will not be created,”Begg said.

Among the speakers scheduled for A New Course for Better Times are: Joan Burton, Minister for Social Protection; Reiner Hoffman, incoming president of German union federation, DGB; Prof Sean O’Riain (NUIM); Niels Pultz, Danish Ambassador to Ireland; Emer Costello, Labour Party MEP; Aengus O’Snodaigh TD, Sinn Fein; Catelene Passchier of Dutch union federation, FNV; Professor David Jacobson, DCU; Tom Healy (NERI); Rory O’Donnell (NESC); John Douglas, Congress President; David Begg, Congress General Secretary, Sally Anne Kinahan, Assistant General Secretary.

The conference takes place on Friday, 11th April 11 in the Round Room at the Mansion House.

To download the full programme click here


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