FG accuses Government over €5.5bn 'deficit '

Fine Gael today accused the Minister of Finance of creating a "deficit" of €5.5 billion in the nation’s finances after Mr McCreevy announced Budget for 2002.

Mr Jim Mitchell, Fine Gael’s spokesman on finance, said Mr McCreevy had "borrowed" €1,245 million from the Central Bank and the Social Inclusion Fund to fund his spending plan. This was a once-off arrangement that was akin to borrowing, added Mr Mitchell.

Mr Mitchell told the Dáil this contrasted with the budget surplus last year of nearly €4 billion and called the change a turnaround on a "gross scale".

He alleged Mr McCreevy had tried to distort the true picture by attempting to announce a €170 million surplus. Mr McCreevy had turned wine into water, Mr Mitchell added.

Mr Mitchell also rejected the suggestion that the foot-and-mouth crisis and the general global downturn contributed to the current state of the country’s finances.

He compared the 4.2 per cent downturn in the State’s finances to that of Britain and France which also had to deal with foot-and-mouth on a much greater scale but whose economies were not suffering to the same degree.

Our economic difficulties are as a result of home-made incompetence, said Mr Mitchell.

The economic downturn in the State was the was the result of a sound economy being turned into a basket case by the Government. "Fianna Fáil has misspent its way into a crisis", said Mr Mitchell .

Mr Mitchell warned spending in the second half of 2001 was 30 per cent more expensive than anticipated. The Budget announced today was therefore storing up trouble for next year, he added.