Tuesday 28 February 2017

Lenihan to face grilling from EU economics chief

Aine Kerr Political Correspondent

FINANCE Minister Brian Lenihan will have to spell out today how he plans to tackle the €15bn hole in the public finances when he meets European Commissioner Ollie Rehn.

The EU economics chief has been in constant contact with Mr Lenihan and is believed to have been pushing for more details on exactly how the Government will meet the 3pc deficit target by 2014.

It is understood that ministers are backing away from proposals to cut the old age pension because they fear a backlash from Fianna Fail backbenchers and the threat of protests by pensioners.

And they are also said to be focusing on adjusting tax credits and PRSI levels rather than tweaking income tax rates.

But sources stressed that no decision had yet been made on either the old age pension or the income tax hikes.

The Cabinet met for over three hours yesterday to discuss the December 7 Budget.

A spokesman for Mr Lenihan said he would be outlining to Mr Rehn the Government's "economic assessment" as set out last week. The Government announced that €6bn in cutbacks are required.

Difficult

The commissioner is expected to remain in Dublin tonight and tomorrow for talks with the Government, and possibly with opposition leaders and the Central Bank regarding the four-year Budget plan.

Last week Mr Rehn said that "difficult" choices now need to be made in order to bring the yawning public deficit -- the highest in the EU -- to below the 3pc limit by a 2014 deadline.

He described the €6bn target as "appropriate".

Mr Rehn's visit comes as Fine Gael leader Enda Kenny yesterday ruled out supporting the Budget if Fianna Fail and the Greens didn't have the numbers to get it passed.

His stance came as Mr Lenihan claimed it would be "highly irresponsible" of the Dail not to pass the Budget.

One TD told the Irish Independent a cut in pensions was the "one issue" that backbenchers could not support and had the potential to collapse the Government.

Fianna Fail's Limerick West TD Niall Collins said that as far as he was concerned, the old age pension had to be "off limits".

Dublin North's Darragh O'Brien said the old age pension must be left alone. "It must be ringfenced," he said.

Cork North Central's Noel O'Flynn has claimed he is now confident the pension won't be cut following a meeting with Mr Lenihan. "Nothing is certain until the document comes out on December 7, but I'm confident there will be no decrease in the pensions of senior citizens."

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business