Quinn says State borrowing may not be needed

THE Government may not have to borrow any money this year, the Minister for Finance, Mr Quinn, said yesterday.

In a further confirmation of the booming state of the country's finances, the Minister said the current budget surplus may be enough to pay for all our capital needs this year. The budget surplus of £580 million forecast two weeks ago may turn out to be much more, he added.

In addition, the general government deficit - the measure used for qualification for the Maastricht Treaty - is likely to be 0.7 per cent from a budget forecast of 1.7 per cent and could be eliminated completely".

He also predicted that Ireland will "comfortably exceed" the targets set by the ESRI in its medium term review.

In a statement last night, Mr Quinn also warned of the difficulties the new administration will face in negotiating new funds from Brussels. He added that the Fianna Fail and Progressive Democrat Programme for Government could over-stimulate the economy.

According to Mr Quinn, the new programme will add an extra stimulus to the booming Irish economy. "To throw into the equation a fiscal stimulus at this time may be foolhardy and endanger all we have achieved. I appeal to my successor to be moderate in his fiscal policy," Mr Quinn said.

Ireland now has 100 per cent average of EU output per head while the eligibility threshold for most structural funds is 75 per cent. In addition, our wealth per head could be 93 per cent of the EU average by the end of the year.