TÁNAISTE Mary Coughlan insists the Government is not looking at increasing its €3 billion savings target in the 2011 budget, despite the recent rises in its borrowing costs.
The Education Minister said last week’s decision on how to wind down Anglo Irish Bank will bring more certainty, which should help bring down the interest rates associated with raising capital to keep the country running.
But while questions have been raised about whether the €3bn savings target set by Finance Minister Brian Lenihan will now be enough, Ms Coughlan said it remains the figure being sought by the Cabinet in its deliberations ahead of the December 7 budget. “We’ve gone through a fairly difficult time reducing our public expenditure considerably and we will continue on the pathway that has been agreed with the European Commission,” the Tánaiste said.
Asked if she is confident that recent or future borrowing cost increases will not push up the budget requirements again, she said: “The Minister [for Finance] hasn’t indicated otherwise and we’re working towards attaining that €3 billion.”
She said the Government is hopefully bringing the issues around our banking system to finality.
“And with the clarity that has been given by the Government following our decision [about Anglo Irish Bank] and new clarity that we will be bringing on the cost thereof at the beginning of October, I certainly hope that will embed the Government’s prima facie case that we are going to proceed with dealing with our public finances and being clearly focused on getting people back to work,” Ms Coughlan said.
However, with a guarantee under the Croke Park deal of no public service pay cuts like those which achieved €1bn of this year’s €4bn budget savings, around €2bn will need to be raised or saved elsewhere in addition to an expected €1bn cut in capital spending next year.
“We have to progress the Croke Park deal and bring it to finality. We would hope we will have continued engagements with the unions. I believe that would be a more effective and efficient way that we could provide services,” Ms Coughlan said.
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