Government ‘should keep discipline and reduce debt’

The Government should continue to pay down debt and maintain budgetary discipline to ensure financial markets retain confidence in Ireland, according to Central Bank governor Patrick Honohan.

“Revenue from better- than-expected post-crisis asset sales in particular should be assigned to the extent possible to reducing the national debt. In the previous three years the seal of approval from the troika allowed the Government to take a longer time to bring the deficit under control,” said Mr Honohan in an address to the UCD Economics Society.

“Now financial markets, still a major determinant of Ireland’s borrowing costs, will look closely at budgetary trends and the Government will do well to convince them of its continued determination to adhere to the medium-term fiscal goals set out in EU law. This advice meshes indeed with the recommendations of the Irish Fiscal Advisory Council.”