THE Government can push through €3 billion of cuts in the December budget despite its wafer-thin majority and eroding discipline, said Brian Lenihan.
“I’m quite satisfied that the budget can be enacted this year,” Mr Lenihan said as he revealed that Budget Day would take place on December 7.
He insisted there had been several positive developments in the economy recently, such as exports increasing and agriculture enjoying “a good year”.
Mr Lenihan also denied there was a lack of confidence abroad in the Government’s ability to solve the country’s problems.
This is despite the fact that Ireland is now paying more to borrow money on the markets – a clear indicator that international confidence in the country has eroded.
“No, I don’t agree with that. A great deal of confidence has been expressed abroad in the Irish Government’s decisions,” Mr Lenihan said.
“World conditions are weak at present, and we are suffering as part of that.
“But I believe if we hold our nerve we will get through this difficult patch, and the confidence... will resume.”
He rejected suggestions that Ireland would inevitably end up defaulting on some of its debt given the fragility of the economy and weakness of the public finances.
He said the budget would contain “measures to boost confidence” in the economy as well as addressing the public finances.
In an interview with Sean O’Rourke on RTÉ Radio’s News at One programme, the minister also insisted that the Anglo bailout remained affordable to the state.
“I must admit I was a bit concerned to see (on Sunday) a suggestion that a lot of public opinion believe that Anglo Irish Bank will bankrupt the country. That’s simply not the case.
“At all stages, the governor of the Central Bank has made clear, and I have made clear, that the costs are manageable. Yes, they’re annoying, they’re infuriating, but they are manageable.”
Nonetheless, Mr Lenihan conceded that it was entirely valid to pose the question – as the New York Times recently did – as to whether a single bank could bring down a country.
“Yes, yes, it’s an entirely reasonable question and we’ve had to live with this danger since September 2008,” he said. “We’ve had to navigate very difficult waters. International conditions have become much more fragile since May of this year. There’s a general uneasiness in European markets generally. We have to hold our nerve.”
A decision is expected shortly on Anglo’s future.
“Whatever works best for the taxpayer – that’s what I will bring before the Government,” he said.
“And if what is best for the taxpayer and for the country in terms of the risks to the country’s solvency... is a workout over an extended period of time, then so be it.”
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