Ministers dismiss possibility of early budget due to Greek fiscal crisis

 

A SUCCESSION of Ministers yesterday ruled out either an emergency or early budget arising from the impact on the State of the spread of the Greek debt crisis.

Minister for Finance Brian Lenihan, who travelled to Brussels for an emergency meeting of EU finance ministers yesterday, said the question of bringing forward the budget, or drafting a supplementary budget, did not arise.

He said the Government had already set out “very ambitious budgetary targets” for this year with no compelling reason to alter them.

A Government source, familiar with his strategy, also argued that there would be no benefit in taking forward public expenditure decisions that have already been stated from December to some point earlier in the year.

“The policies that have been followed are now bringing to bear fruition. Growth of 3 per cent has been forecast for next year. The budgetary projections are on target. We cannot see what difference bringing the budget forward will have,” said the source.

Tánaiste Mary Coughlan also echoed that view when speaking during a regional Fianna Fáil conference in Trim, Co Meath.

“Budget decisions that was made last year for this year will continue [being implemented], especially in the context of decisions we have made on our public finances.

“There is stability within public finances now. There’s a view that we can turn later on this year into economic growth and that potential is there. Because of that we do not feel there is a need for a budget,” said Ms Coughlan, who is also Minister for Education.

Asked if she was saying that Ireland is sheltered from a negative impact from the Greek crisis, she replied that the Government had taken tough decisions two years ago and late last year. “We are confident that having made the decisions we are not in the same unfortunate position that other colleagues are in.”

Minister for Community Affairs Pat Carey also dismissed any prospect of an early budget.

“We will continue on the path we have set ourselves [which includes] further reductions,” he said on RTÉ’s Week in Politics.

However, economist Colm McCarthy, lead author of the report on public sector savings, warned that further public sector cuts might be necessary.

Appearing on the same programme, he said: “It’s irresponsible for any person in a leadership position to dream up new things to spend money on.”

Former Irish EU commissioner Peter Sutherland also said he believed further cuts would be necessary, basing his argument on market sentiment. “I think we will continue to need, on a yearly basis, further cuts or taxes to balance our books. It’s the whole issue of markets being satisfied and confident about what countries are doing,” he said.