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Households warned 'worse yet to come'

HOUSEHOLDS were last night warned the "worst is yet to come" after it emerged the hole in the Government's finances is heading for €15bn.

Taoiseach Brian Cowen yesterday came under sustained fire in the Dail from opposition parties who accused him of lacking the "credibility" to sort out the country's finances.

The hard-hitting charges came as Mr Cowen confirmed he will meet with the Fine Gael, Labour and Green Party leaders in Government Buildings today in a bid to build consensus on the four-year Budget framework.

But with Fine Gael and Labour still reeling from the figures produced by the Department of Finance on Monday, they are not expected to reach any consensus or agreement with Fianna Fail and the Greens.

Labour leader Eamon Gilmore claimed taxpayers had been repeatedly told the "worst is over" and the country has turned a corner. "But the worst is yet to come," Mr Gilmore said.

The Government's original €7.5bn target for the next four years is now "way wide of the mark", the Labour leader added.

Instead, savage cutbacks of at least €10bn are definitely on the cards up to 2014, according to sources close to discussions in the Department of Finance.

The worst-case scenario is an adjustment of €15bn as a result of lower predictions on the rate of economic growth.

The deficit reduction will not be spread evenly over the four years -- that means the worst hit will come in December. Rather than a €3bn package of cuts and taxes, the adjustment will certainly be as high as €4.5bn and could break the €6bn mark.

Irish Independent