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Noonan seeks German support for softer Budget

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Interest on the national debt was €2bn in the first three months, which is a lot of money, but almost €200m less than Mr Noonan pencilled in as recently as October

Interest on the national debt was €2bn in the first three months, which is a lot of money, but almost €200m less than Mr Noonan pencilled in as recently as October

Interest on the national debt was €2bn in the first three months, which is a lot of money, but almost €200m less than Mr Noonan pencilled in as recently as October

FINANCE Minister Michael Noonan is courting German backing for a deal to allow Ireland bend EU budget rules.

The Government wants the rules on how much Ireland can spend on investment to be softened ahead of the next Budget, claiming faster than expected growth here should allow the minister to spend up to €1.5bn more next year.

Budget 2016 will be the last before the general election, and the Government has flagged the possibility of cutting taxes.

Mr Noonan said he had argued that France had been given more flexibility over its budget deficit in calling for flexibility in the rules for Ireland.

The Government supports France's bid for leniency, he said. "The relevance of it is to give me budgetary space to make decisions for the 2016 Budget that I'll be introducing in October," Mr Noonan said in Brussels yesterday.

"Whether or not I use the space is not the issue. It's simply to give me the space so I'm not inhibited by European rules to spend money that I think is necessary.

"The way the tax take is going and the way the growth figures is going, we'll have money. We'll still be able to bring the deficit down again next year, significantly. Probably the deficit in the next Budget will be beginning with a one."

Mr Noonan said he wanted to be able to prepare the Budget in a way "that I think is best for the economy". The minister said he had spoken to German Finance Minister Wolfgang Schauble on the margins of yesterday's meeting of European finance ministers, during which France was given an extra two years to meet its deficit target, and said he "got the point immediately".

The European Commission sets limits to how much a country can spend based on its growth rate. But Mr Noonan said the Commission is using an outdated growth rate.

Irish Independent