Thursday 8 December 2016

Budget correction of €6bn is appropriate, says Rehn

Sarah Collins in Brussels and Fionnan Sheahan

Published 05/11/2010 | 05:00

European Commissioner for Economic Affairs Olli Rehn warned that 'difficult but necessary' choices would face Finance Minister Brian Lenihan in the following years. Photo: Bloomberg News
European Commissioner for Economic Affairs Olli Rehn warned that 'difficult but necessary' choices would face Finance Minister Brian Lenihan in the following years. Photo: Bloomberg News

THE European Union's economics chief has described the Government's planned €6bn in budget cuts next year as "appropriate".

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However, European Commissioner for Economic Affairs Olli Rehn warned that "difficult but necessary" choices would face Finance Minister Brian Lenihan in the following years.

Fine Gael and Labour adopted different positions on the Government's €6bn figure.

Fine Gael finance spokesman Michael Noonan was critical of the Coalition's approach, but accepted the €6bn figure was necessary.

His party disagrees on the economic growth projections for next year too, believing a stimulus package would help the position.

Labour Party finance spokeswoman Joan Burton said a €6bn hit was unacceptable as her party believed an adjustment of €4.5bn would be more appropriate.

Ms Burton still disagrees with the Government's overall figure of €15bn over four years -- but has not yet provided an alternative figure. Labour "finds it difficult" to believe the Government's growth figures too.

Mr Rehn said that "difficult" choices now need to be made in order to bring the yawning public deficit -- measuring 14.4pc of gross domestic product, and the highest in the EU -- to below the bloc's 3pc limit by a 2014 deadline.

"I welcome the continued commitment to reducing the deficit to below 3pc by 2014," he said. "This provides an important anchor for financial markets. Difficult but necessary choices are still to be made as regards the measures needed to reach this objective."

Mr Rehn will visit Dublin next Monday "to discuss further details of the Irish Government's four-year plan", according to a statement from his office.

Mr Lenihan has estimated a total of €15bn will need to be hacked off public spending in the next four years to meet the 2014 target, a figure European Central Bank head Jean-Claude Trichet called "not insufficient" yesterday.

Speaking just hours ahead of Mr Lenihan's announcement, Mr Trichet added: "You have to be alert permanently and stand ready to do all that is needed."

Irish Independent

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