EU Commission gives budget warning

If the Government wants to ease up on the planned €2bn budget adjustment in October, it will have to prove it can achieve the 3% deficit target by 2015 through sustainable growth rather than one-off measures, according to a EU Commission source.

The Irish Government has agreed through the excessive deficit procedure to reduce its deficit below 3% by the end of 2015. Moreover, by 2018, under the Fiscal Stability Treaty, it has agreed to achieve structurally balanced budgets.

According to the terms of the excessive deficit procedure, the Government is set to implement €2bn in fiscal consolidation in October’s budget in order to reach the 3% target.