Only €500m for next finance minister's budget

The head of the country’s budget watchdog said the next finance minister has little to spend in October’s budget if Ireland wants to keep with the EU oversight rules.

And warning about the way the Government has spent huge one-off tax bounties in the past — including spending a surge in corporate tax revenues — Seamus Coffey, the new chairman of the Irish Fiscal Advisory Council (IFAC) warned the potential €3bn in proceeds from the sale of shares in AIB should go to pay down debt and not be used to pump up levels of spending further.

It was Mr Coffey’s first presentation of the watchdog’s bulletin since he took over earlier this year from John McHale, who was the first chairman of the watchdog since it was set up to prevent the re-occurrence of the conditions that led to the financial crash.