Lenihan defends budget deficit after EU report

The Minister For Finance is attempting to clarify the true scale of Ireland's budget deficit after Eurostat - the EU's statistical service - published a report identifying Ireland as having the biggest gap between borrowing and revenue in the European Union.

In a statement, Brian Lenihan pointed out that Ireland's underlying deficit - a figure which does not include the one-off payments to bail out the banks - is just less than 12%.

Eurostat includes the multibillion euro debts incurred to support Irish financial institutions and puts the deficit for this year at 14.3%.

That is comfortably the highest in the Eurozone and even puts Ireland ahead of Greece - which is teetering on the edge of defaulting on its debts and may have to avail of a €30bn rescue package from its Eurozone peers.