herald

Thursday 19 October 2017

Fine Gael can’t sign up to €15bn cuts yet

FINE Gael is "not yet" accepting that savage cuts totalling €15bn will have to be made by 2014.

The main Opposition party said today that, while it still accepted that there were only four years to reduce the country's deficit to 3pc of GDP, it was not sure about the financial implications.

However, Tourism Minister Mary Hanafin said: “Given that the Opposition parties have signed up to the 3pc they should be accepting the €15bn now.”

Finance Minister Brian Lenihan is expected to reveal further details of his four-year Budget plan during two days of economic debate in the Dail.

He is also likely to try to “smoke out” Fine Gael and Labour's plans for economic recovery during what will be heated discussions this afternoon and tomorrow.

The Government continues to argue that “everything is on the table” ahead of the publication of Budget plans aimed at reducing our spending by €15bn by 2014.

And Mr Lenihan appeared to drag the controversial Croke Park agreement back into the limelight last night by saying it needed to be more ambitious.

The pact, which was agreed with unions earlier in the year, means that the minister is restricted from imposing pay cuts or compulsory redundancies on the public sector.

Intense

But last night he said: “I do think the ambition of the Croke Park agreement will have to be broadened and deepened in relation to savings that can be secured by it.”

The statement came after Mr Lenihan confirmed fears that the adjustment to the public finances would be twice the €7.5bn originally signalled.

After two days of intense cabinet meetings, the Government also released a statement in which it predicted that growth would average 2.75pc over the next four years.

They said that the less-optimistic outlook was the result of higher-than-expected interest rates and lower-than-anticipated growth.

The minister accepted that a “significant” amount of the €15bn figure would be targeted this December.

Fine Gael's finance spokesperson Michael Noonan linked yesterday's announcement with a meeting between Mr Lenihan and EU Commissioner Olli Rehn on Monday.

Mr Rehn is to visit Ireland next month in a move that suggests the EU is now placing Ireland under closer scrutiny than ever before.

But Ms Hanafin argued: “We have to ensure that we present a plan that not only is acceptable from an Irish point of view but is also acceptable to the markets and the EU.”

kdoyle@herald.ie

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