Kenny: We must stick to budget targets

Backing off from Ireland’s deficit targets for the upcoming budget could have an impact on jobs, Taoiseach Enda Kenny has warned.

Mr Kenny also said ministers would have “difficult decisions” to make on delivering promised savings.

Speaking in Glenties, Donegal, he suggested that any flexibility in the budget should instead be used for investment in job creation.

The Taoiseach’s comments follow a warning from Klaus Regling, head of the European Stability Mechanism, that a failure to implement agreed targets would “not be well received” by Europe.

Ireland’s fiscal advisory council yesterday also said any reductions in projected savings, such as social welfare, could result in deficit targets not being met.

Mr Kenny told the MacGill Summer school it was necessary to “stick to the targets” in order to exit the bailout programme by the end of the year. Ireland has agreed to get its budget deficit below 5.1% next year but it remains unclear whether this will require a cut of €3.1bn or less, Mr Kenny added.

“Failure to do so, and for all our hard work and all our sacrifices ... will jeopardise everything we have worked for,” said Mr Kenny. “We can’t allow that to happen because the people quite rightly would never forgive us for so doing, if we falter and fall at the last fence.

“Ninety percent of the fiscal consolidation is now completed and we do not want to shirk our responsibility or fall back from the progress that we have made.

“Any short-term relief backing off our deficit targets here would have an impact on jobs and employment.”

Sections from the Taoiseach’s scripted speech, which were not read, added: “Every minister will have difficult decisions to make to deliver on the savings they have promised.

“The public have entrusted us with the national finances and expect us to do our duty no matter how difficult it may be.

“The best way to support our local economies is through the creation of jobs.

“Any flexibility we have in the budgetary arithmetic should be used for more investment in job creation.”

Meanwhile, the latest quarterly economic outlook from employers’ group Ibec says that, despite a weak start to the year, there are signs that the Irish economy has picked up in recent months.

The group warned, though, that consumers remained nervous and said that it was vital that the forthcoming budget did not undermine confidence by increasing taxes.

It predicts that GDP will grow at 1.1% this year and rise to 2.3% in 2014.