McCreevy is ready to risk approval for hard choices

The Minister for Finance has hinted at a "difficult" Budget next week, warning he is ready to make hard choices at the price of short-term popularity.

Declaring the Government will take a "long-term view" rather than seeking to boost approval ratings, Mr McCreevy said the Budget would lay the bedrock for long-term economic regeneration.

He said: "Next week's Budget will be strategic in its outlook and will set the scene for further economic recovery. The Government believes firmly in taking the long-term view and making the choices that are in the long-term interest of the Irish people and the Irish economy.

"Our absolute commitment is not to react to short-term difficulties, but to take decisions which will preserve and enhance our capacity to grow at our full potential." Mr McCreevy, addressing marketing leaders at the Smurfit Business School in UCD, warned future wage rises must be "moderate and predictable" if competitiveness was to be preserved.

He said: "The imminent enlargement of the EU poses a real challenge to the Irish economy and it is imperative that we maximise our competitiveness to meet this challenge and benefit fully from the opportunities it presents to us. Going forward, moderate and predictable wage development must continue to underpin our economic development."

Although the economy continues to outperform its European peers, the Minister cautioned against complacency.

"There are signs of a recovery in the international economy, especially in the US... It is not good enough to simply wait for that recovery. We must continue to manage the economy and ensure that it is as well placed as possible to benefit to the maximum extent from a global economic recovery.

"We cannot price ourselves out of markets with unrealistic wage increases."