Common analysis would be 'very helpful', says Lenihan

Minister for Finance Brian Lenihan has said a common analysis of the economic situation would be "very helpful" but ruled out the possibility of creating a government of national unity ahead of the budget.

Mr Lenihan made his comments after Green Party leader John Gormley said he was 'confident' an all-party approach could be reached by the end of next week.

Speaking on RTE's News at One, Mr Lenihan said he “very much welcomed” that Fine Gael and Labour have signed up to reducing borrowing down to 3 per cent of annual wealth by 2014.

He said the Government will seek savings well above an initial target of €3 billion in the 2011 budget.

It was reported yesterday that Mr Lenihan will seek up to €4.5 billion in adjustments following comments made by Minister for Social Protection Éamon Ó Cuív appeared to indicate the scale of planned cuts in the forthcoming budget will be of the order of €4.3 billion.

"Clearly the figure this year will be well above the existing figure of €3 billion," Mr Lenihan tolf RTÉ.

"The world conditions for the next three years are not as good as has been predicted and that creates difficulties in terms of how we deal with our deficit," he added.

Commenting on a push by Green Party leader John Gormley for a cross party forum on the economy, Mr Lenihan said the Government had agreed to share the economic analysis with the Opposition.

"I think it would be very helpful if we could develop that sense of a common analysis of what the problem is.

If all of the parties subscribe to a common analysis of the economic problems of the country then clearly it would be much easier to secure a united national effort behind jobs and growth and budgetary correction,” he said.

Mr Lenihan said a forum of parties "may be of value" but insisted that "before we set up another talking shop" the parties would we have to "determine that we agree on what the problem is. If we have that shared analysis that would be very valuable."

He said the Opposition has taken "the first step" by recognising the three per cent target. In turn, he said, the Govenment

has responded by making the facilities of the Department of Finance available. He said the next step then, "is to see whether we do in fact have a common analysis".

"I think that is very important. And really, talks of forums and national governments in advance of those first three steps is misleading."

Mr Lenihan ruled out the creation of a national government of unity ahead of the budget.

"It is clear that there isn’t time to construct a national government by the middle of November and for such a radically new government with new ministers settling into their positions by the 15th of November wouldn’t deal with the urgent and necessary issues that must now be addressed from the country’s point of view", he said.

Mr Lenihan made his comments after Green Party leader John Gormley said he believes an all-party approach to the economy would be possible and would be in the "national interest".

Mr Gormley’s comments came a day after a Fianna Fail minister insisted the idea has not been rejected by Taoiseach Brian Cowen.

Minister of State for Overseas Development Peter Power, said remarks made on Friday by the Taoiseach had been ‘misinterpreted’ by the media and that he would, in fact, welcome a 'national consensus' on the economy.

Speaking this morning on RTE radio’s Marian Finucane show, Mr Gormley said he has spoken with Taoiseach Brian Cowen and Labour Party leader Eamon Gilmore and said he believed the party leaders would meet “in a room by the end of next week.”

Mr Gormley said “of course” there will be “suspicion” and there will be “scepticism”, but “we can take the first tentative steps now."

Mr Gormley said he was confident the two main Opposition parties would engage in a such a process.

"We do that next week by opening the books. Fine Gael will go into the Department of Finance, Labour will do the same. And, I'm very confident that by the end of next week we will have the party leaders in a room talking about this issue," he said.

"It will have to happen. Otherwise...we are in deep trouble."

Mr Gormley announced his plan last week in which an all-party forum would be established to discuss a four-year plan to deal with the public finances.

Under Mr Gormley's plan, the forum would comprise the Taoiseach and Minister for Finance, the leaders of Fine Gael, Labour, the Green Party and Sinn Féin, along with their respective finance spokespeople.

Department of Finance officials would brief the group and explain the basis for their figures and projections

Despite Taoiseach Brian Cowen's refusal to endorse it last week, Mr Gormley said he was confident such a process could be successful.

The Green Party leader said he was “open to consensus”. That is why “we need to open these doors, get into that room, and talk about the type of adjustments.”

He said he believed the parties may not be too far apart in terms of policy.

“There may not be that wide a gap be there”.

He said there “may be broad agreement” on addressing the deficit crisis and whether measures taken should be “front-loaded” or “back-loaded” and whether the adjustments should be based on tax increases or expenditure cuts.

“These are the broad parameters on which I believe we can reach agreement,” Mr Gormley said.

“I believe it is genuinely in the national interest that we to do this at this stage. It is not and it cannot be politics as normal. It just cannot be because it is not business as usual at the moment,” he added.

Labour’s Ruairi Quinn was less enthusiastic. Speaking on the same programme, Mr Quinn said “twice in my political lifetime”, Fianna Fail have taken Ireland “to the brink of bankruptcy”.

He accused the majority coalition party of being “economically illiterate” and that “on every single judgement call, they have got it wrong”.

He said Mr Cowen’s invitation to the political parties to engage was based on the premise of “send us a few ideas and we’ll have a look at them”.

“He is the most tribal leader this country has ever had. If you’re not from Fianna Fail, you don’t count”, Mr Quinn said.