The Government has signalled next year’s budget cuts could be higher than the €3.5bn planned.
The prospect of harsher cuts and more taxes in 2013 comes as CSO figures show half of households have cut back on groceries while a fifth missed bill payments.
In the latest agreement with the troika — required to release €5.8bn in loans — the Government inserted the word "at least" before the 2013 adjustment target of €3.5bn. It is the first time the Government has admitted that a bigger adjustment might be needed.
In a letter accompanying the memorandum of understanding, Michael Noonan, the finance minister, says Ireland has met or improved on its targets so far under the €85bn bailout deal.
However, he warns: "The degree of uncertainty and margins of error surrounding macro-economic and fiscal projections over the period remain high, due mainly, but not exclusively, to international events."
He tells the troika: "While we do not envisage that revisions will be needed, we stand ready to take any corrective actions that may become necessary to meet changing circumstances."
A spokesperson said there has not been a policy change in relation to the €3.5bn adjustment next year and that there is always a certain level of flexibility built into these plans.
The agreement commits Government to providing details on what sanctions are imposed on jobseekers who refuse Fás interviews and mentions funds raised from the sale of state assets will be used for job creation.
a d v e r t i s e m e n t
This appeared in the printed version of the Irish Examiner Wednesday, February 15, 2012
