Sunday 4 December 2016

FG and Labour refuse to sign Lenihan's super-Budget pledge

ine Kerr and Fionnan Sheahan

Published 23/10/2010 | 05:00

FINE Gael and Labour last night refused to sign a letter from Finance Minister Brian Lenihan promising to meet the target for reducing the Budget deficit.

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Mr Lenihan sent the parties a draft joint statement on the four-year super-Budget to be signed by himself, Fine Gael's finance spokesman Michael Noonan and Labour's finance spokeswoman Joan Burton.

The statement said there should be "no ambiguity" about their positions on the "important matter" of reducing the deficit to 3pc of GDP by 2014.

Fine Gael and Labour have both agreed that this target must be met.

The move follows the failure of the cross-party talks earlier this week.

However, Fine Gael and Labour are understood to be puzzled by the development because Mr Lenihan, Taoiseach Brian Cowen, and Green Party leader John Gormley had already each welcomed the main opposition parties' commitment to the four-year target agreed with the European Commission.

Both parties are resisting the attempt by the Government to link them to the forthcoming Budget.

The Department of Finance last night refused to explain why the letter was sent only hours after opposition parties had repeated their support for the targets.

However, it is understood there was concern that "uncertainty" might be created by an report from the country's leading economic think-tank calling for the multi-billion cutbacks to be spread over six and not four years. But neither Fine Gael nor Labour has given any indication that the Economic and Social Research Institute's report had changed their mind on the four-year target.

Government sources said it was felt it would be "no harm" to get Mr Lenihan, Mr Noonan and Ms Burton to reiterate their positions on foot of that report in case any uncertainty was created in the markets or abroad.

The joint statement was an effort to give "reassurance", a coalition source said.

The surprise letter issued by Mr Lenihan followed Mr Cowen's acceptance on Wednesday night that opposition parties were fully committed to the targets.

Mr Lenihan contacted Ms Burton by phone to advise her of the joint statement he was proposing, which was then emailed to her at around 5 on Thursday evening.

Ms Burton said she had replied to Mr Lenihan on Thursday night to tell him that such a joint statement would have "no value".

"I told the minister that the Labour leader has already stated the position of our party," she told the Irish Independent last night.

"The 3pc target by 2014 is the position of the Labour Party. The minister is trying to create ambiguity here and I've no idea why," she added.

A Fine Gael spokesman said the 2014 target had been reiterated on numerous occasions.

"That commitment remains clear and that commitment has been acknowledged by the Taoiseach," the spokesman said.

Angered by Mr Lenihan's move, an opposition source said it was an "insult" after both Fine Gael and Labour had been clear on their position.

Irish Independent

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