Gilmore rejects call to stick to €3.1bn budget adjustment

Gilmore rejects call to stick to €3.1bn budget adjustment

Tánaiste Eamon Gilmore has rejected calls from the head of the European Stability Mechanism to adhere to a €3.1bn adjustment – insisting the Government will stick to a different target.

Setting out his stall, the Labour leader said the country had agreed to make crucial savings based on a percentage target and not a sum of money.

He said the Government would achieve its goal – to reduce the deficit target to 5.1% of gross domestic product (GDP) – but would do no more than necessary.

“Our view is that we will meet our target of 5.1%. We will do what is necessary in order to do that,” Mr Gilmore said.

“That will still be very significant and this will be a challenging budget as all of the budgets have been.

“But I don’t see a case of doing more than is necessary to meet the target that has already been approved with us.”

The Tánaiste was repeating remarks he made to the Irish Times, in which he ruled out aiming for a €3.1bn adjustment this October in the 2014 budget.

This was despite calls from head of the Eurozone rescue fund Klaus Regling to make that amount in savings.

Mr Regling, managing director of the European Stability Mechanism, warned that Ireland’s failure to do that would not be well received by European finance officials.

But Mr Gilmore insisted Ireland’s agreement was based on different terms.

“The targets that have been set and agreed for Ireland have been expressed in percentage terms, not in terms of quantums of money,” he told RTE radio.

“We’ve met all of those targets. Each of those percentage targets, in fact exceeded them in each successive budget.

“The target for next year is 5.1%. We are determined to meet that target and to get the deficit down to under 3% by 2015.”

He added that “some voices” would argue if Ireland were to fall short of its 5.1% target that it should hike the €3.1bn adjustment to reach it.

Ireland hopes to reduce its deficit to 5.1% of GDP in 2014, and to get it down further to 3% by 2015.

Taoiseach Enda Kenny claimed last week that budget 2014 will be the last of the difficult budgets, as Ireland claws its way back to recovery.

He insisted the squeeze will have eased by 2015.

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