Howlin wants budgetary adjustment below €3.1 billion

Minister for Public Expenditure and Reform Brendan Howlin would like next year's budgetary adjustment to be lower than €3.1 billion "to allow the pace of recovery to be embedded".

Addressing the Chartered Accountants Leinster Society in Dublin today, Mr Howlin said he had heard arguments both for and against a full €3.1 billion consolidation.

His belief, he said, was that a lower adjustment would not “in any way” be inconsistent with meeting bailout-imposed target of a deficit of 5.1 per cent of GDP next year.

He said the job of drawing up next year’s Budget, to be delivered on October 15th, was being shared by all government departments, to an extent much greater than “in my last term in government”.

He said Budget 2014 would be “a further step” towards recovery.

“It will be difficult but we will endeavour to make it as fair and as job friendly as possible,” he said.

He said he had already had some bilateral discussions with Cabinet partners and had more scheduled for next week.

Mr Gilmore further described the nature of the Cabinet negotiations.

“There is no secret or mystery that budget negotiations are always the most difficult, they are always the talks that go to the last minute of the last night,” Mr Gilmore said. “Do we knock heads, do we argue the toss up to the last minute? Of course we do.”

Mr Gilmore confirmed that the Government is considering seeking a precautionary credit line from international authorities as it exits the bailout.

“We haven’t made any decision yet, we’re looking at options,” he said.

“We do think it would be prudent to look at the idea of a backstop. We think it would be reassuring for the markets.”

Mr Howlin meanwhile reassured his audience of accountants that the Coalition was “very mindful of the impact of all of our decisions on the first priority of Government, which is jobs”. He said Budget 2014 would be “a further step” towards recovery.

“It will be difficult but we will endeavour to make it as fair and as job friendly as possible,” he said. – (Additional reporting: Bloomberg)