ESRI: Budget deficit target too ambitious

The Government's target to reduce the Budget deficit to 3% by 2014, a leading think-tank said today.

The Economic and Social Research Institute (ESRI) is warning the plan could hamper economic growth and lead to a prolonged recession.

The ESRI accepts that it is critically important Ireland addresses the crisis in the public finances, but it says the timeframe of four years, as agreed with the European Commission, is too tight.

Finance Minister Brian Lenihan said however that seeking an extension in Europe now would be "devoid of any credibility".

The ESRI has also brought back into focus the Croke Park Agreement.

It believes the deal will have to be re-examined if our targets are to be met.