EU demands 'credible' plan to slash our deficit
Published 01/10/2010 | 05:00
THE Government must stick to the 2014 deficit deadline in order to restore the country's financial credibility, EU policymakers insisted yesterday.
They have also demanded a "sector by sector" and "year by year" outline of how Ireland's soaring deficit -- predicted to swell to 32pc this year on the back of one-off Anglo injections -- will be brought back into line.
"What is absolutely key for us is credibility --and the delivery of this unequivocal commitment to correct the excessive deficit by 2014 will be key for the credibility of Ireland," European Central Bank president Jean-Claude Trichet told reporters.
The Government is currently under increased surveillance by EU authorities for flouting the bloc's spending limits, which say a budgetary shortfall should not measure more than 3pc of a nation's total annual output.
The deficit in Ireland's finances is equal to 11.5pc of gross domestic product (GDP). That is the highest in the 27-member EU -- and it doesn't include extra money pledged to clean up the Anglo mess.
Mr Lenihan will publish a four-year plan in November to mend the public purse, a move that is eagerly awaited by EU economics chief Olli Rehn.
He said: "It is essential that Ireland will shortly unveil a confidence-building, multi-annual, four-year budget plan setting out concrete measures, sector by sector, for all the years from 2011 to 2014 to reach sustainable public finances."
His comments were echoed by Jean-Claude Juncker, Luxembourg's prime minister and head of the group of eurozone finance ministers, who said the Government could only absorb the mammoth cost of Anglo if the deficit in the public finances was reined in.
He said: "(The cost) is very large and manageable -- on condition that Ireland can, as I trust, present a convincing multi-annual fiscal strategy covering the years 2011 to 2014."