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EU gets tough

Finance Minster Brian Lenihan has been warned by the EU that further tough budget cuts will be needed.

The EU Commission has demanded additional action on public-sector pensions and wants more detail on Government plans for further cuts over the next few years.

The Government has predicted growth of 3.3pc next year whereas the EU has forecast that Ireland's economy will grow by just 2.6pc.

"The budgetary outcomes could be worse than targeted in 2010 and considerably worse than targeted thereafter," an EU report said.