Cowen leaves door open for harsher December budget

TAOISEACH Brian Cowen appeared to leave the door open last night for a harsher December budget than originally proposed.

Asked if the €3 billion in cutbacks already signalled for the budget would be enough, Mr Cowen said the Government would need “at least” that much.

But like Finance Minister Brian Lenihan, Mr Cowen rejected any suggestions that the Government would be pressurised into bringing the budget forward to demonstrate it was managing the country’s debt.

“The question of acceleration of deficit-reduction strategies, depending on the circumstances of every country, is not directed to Ireland,” Mr Cowen told Today FM’s The Last Word programme. “Ireland have (already) made moves and Ireland, as I say, have been commended even over this weekend for the moves we have made.”

Asked if that meant there would not be an early budget, he replied: “No, there won’t be an early budget. Brian Lenihan has made that clear.”

Asked if the budget would contain more than the €3bn cuts signalled, Mr Cowen responded: “We have received no formal or informal indication from anybody that that would be expected of us.”

Mr Cowen was then pushed on whether it would be a good idea for the Government to act on its own initiative and increase the €3bn cutback target anyway.

“Well, on our own initiative, we, of course, will look in detail at everything, but we have a commitment to at least €3bn,” he replied. “We will be in touch with the (European) Commission in due course, as we always are, indicating what our strategy is going to be in broad outline.”

He reiterated that, unlike some other struggling EU states, Ireland had taken action in recent budgets to begin the process of fixing the public finances.

He also downplayed talk of Ireland being part of the “PIIGS” – an acronym for Portugal, Ireland, Italy, Greece and Spain, the countries in the EU considered to be struggling worst with debt.

“We’re not in the same position [as the others],” he said. “Look, there are people who referred to that unfortunate acronym at a time back in 2008, 2009 . . . but we have moved (since).

“That’s not to say for one moment that we’re out of the woods. But what it shows is that you gain credibility internationally in these markets if you make these moves. We made changes in 2009 to the tune of 5% of GDP, and we made changes to the tune of 2.5% this year.

“We have more to go, I acknowledge and accept that, and we have indicated that there are further issues. But we are also seeing the prospect of growth coming back into the economy, which has to be an important component of the correction process.”