EU urges Ireland to do more to reduce budget deficit

The EU has asked Ireland to do more to reduce its budget deficit this year, while holding off on taking Spain, Portugal and Italy to task for budget overruns.

Despite officially removing Ireland from a list of countries requiring extra surveillance under the “excessive deficit procedure”, the Commission said a 2016 budget target is in doubt because of health overspending and tax cuts.

Ireland’s overall deficit was 2.3% of GDP last year, below the EU’s 3% limit, but the Government still needs to meet a structural deficit target of 0.5% of GDP in 2018 (which strips out cyclical swings and one-offs such as bank bailouts).