Ireland should stick to its fiscal targets, EU economic and monetary affairs commissioner Olli Rehn said this morning signalling that the government should not use gains made from a key bank debt deal to soften future budget plans.

The Government struck a deal earlier this month that will ease its deficit path from next year, and the government then promised voters a 20 per cent reduction in the €5.1 billion of austerity measures planned by 2015.

After Minister for Finance Michael Noonan took a step back and said last week that it was too soon to say for sure what the leeway would mean for next year's budget, Mr Rehn was similarly cautious during a brief trip to Dublin today.

"I have heard that this has been in some discussions, referred to as windfall gains from the deal on the promissory notes. I'm a bit surprised by that," Mr Rehn told RTÉ's Morning Ireland programme. "It's very important to stick to fiscal targets and ensure the debt burden can be reduced in due course. It is essential that euro area member states respect the commitments that have been taken."

Mr Rehn was in Dublin Castle this morning, where he addressed a meeting of the chairs of the Finance Committees from the parliaments of EU member states on fostering better integration growth and budgetary control.

Mr Rehn, who said there was no time for complacency in dealing with the euro zone's debt crisis, added that he was confident Ireland would be able to exit its EU-IMF bailout schedule and return to regular market funding on schedule later this year.

The European Commission's winter economic forecast predicts that Ireland’s fiscal deficit is expected to come in at 7.3 per cent of GDP this year and 4.2 per cent next year, but these figures could be increased due to financial sector support measures, including the resolution of certain credit unions.

Reuters