Opposition refuses to give Rehn guarantees on cuts
Published 10/11/2010 | 05:00
The EU's economics chief was told by opposition parties yesterday that they won't sign up to the Government's four-year budgetary plan if they don't agree with it.
But the Government will not be reopening cross-party talks in an effort to try to achieve the consensus European Commissioner Olli Rehn called for during his visit.
Fine Gael and the Labour Party are signed up to reducing the deficit over the next four years to 3pc of economic output.
While Fine Gael agrees with the Government's plan to cut €6bn next year, Labour believes this figure is too high and feels €4.5bn would be more appropriate.
Mr Rehn sounded out Fine Gael and Labour on their commitment to repairing the country's public finances.
He is acutely aware of the political developments in this country and that the opposition parties are likely to be in power for the duration of most of the four-year plan.
Mr Rehn piled pressure on the opposition to support the package of spending cuts and tax hikes. But he did not attempt to force them to vote for the Budget.
And he even indicated that the €15bn overall package of cuts was a moveable feast and could be negotiated.
Fine Gael and Labour said they needed to see the plan first, but neither party gave any guarantee that they would back December's Budget if they were not satisfied with its contents.
Despite Mr Rehn strongly endorsing the €6bn figure for next year, Labour leader Eamon Gilmore told Taoiseach Brian Cowen that a cut this large would damage the economy and his party wanted a cut of €4.5bn.
"Your judgment in this matter may be wrong," he said.
But Mr Cowen pointed to Mr Gilmore's claim that the international markets were not convinced by the €6bn figure.
"I don't know how €4.5bn will generate more confidence," he said.
Fine Gael's finance spokesman Michael Noonan pointed out that on the €6bn adjustment next year and the €15bn package over four years, Mr Rehn agreed there were various estimates of growth.
"I mentioned to him the ESRI prediction and the Davy stockbroker prediction and the Department of Finance prediction and depending on whose growth rate you take, the correction could be anywhere between €9bn and €20bn," Mr Noonan said.
"So he took that point and discussed it briefly but he agreed that it's not whether the figure is accurate or not that is the issue. The issue is whether the figure is credible on the markets."
Green Party minister Eamon Ryan said consensus on the Budget and the four-year plan was the "best way forward" as he welcomed Mr Rehn's calls for political unity.
But a coalition spokesman said that there was no plan at present to try to restart cross-party talks.
The Government was still open to listening to any ideas put forward by the opposition, the spokesman added.
Taoiseach Brian Cowen yesterday refused to name an exact date for the publication of the Government's four-year plan.
Mr Cowen said the plan would be published in the week beginning November 15 or November 22 "based on when we finalise it".
But he didn't offer any reassurance that the plan would appear before the Donegal South-West by-election on November 25.
Pressed by Labour leader Eamon Gilmore about the exact date the plan would be published, the Taoiseach retorted by ridiculing the Labour candidate in the by-election, Frank McBrearty.
Government must cut a deal that gives people hope, David Mcwilliams: Page 25