Noonan insists €2bn cuts won’t be needed

Finance Minister Michael Noonan is adamant he does not have to cut €2bn from the budget, while the EU opened a glimmer of hope Ireland could get retrospective bank recapitalisation. But Mr Noonan would not say if his budget would leave more money for services, or mean tax cuts for some.

All the EU required was he stick to the timeframe of cutting the deficit to less than 3% of GDP next year. But while the figures in April indicated this would need a budget cut of €2bn, the latest data was better and he would need less to reach the target.

President of the Eurogroup, Jeroen Dijsselbloem, appeared to contradict a senior EU expert when he said that using the EU’s rescue fund to recapitalise Irish banks retrospectively was technically but not politically possible.