Irish watchdog sounds alarm over budget plans

Budgetary watchdog the Irish Fiscal Advisory Council has put the Coalition on notice to change its budget in October because it believes plans for spending hikes and tax cuts will fall foul of the “letter and spirit” of Europe’s strict fiscal rules.

IFAC has warned that it believes that the Government’s plans for at least €1.2bn in tax cuts and spending increases in the budget break Europe’s debt-reduction target in significant ways.

The watchdog’s warning is highly significant because the Coalition is preparing for an October budget which will be last before the election. IFAC was set up three years ago by law with a mandate to scrutinise Ireland’s budgets and help prevent a return to the disastrous boom-and-bust economic cycles of the past.