Rehn: Ireland can overcome crisis

The European Commissioner for Economic Affairs says determined and painful decisions will be needed to solve the economic crisis here but Ireland will prevail if it does what is necessary.

In discussions today Olli Rehn also indicated that the proposed €15bn of cuts over the next four years was not set in stone and could be revised based on economic growth.

Speaking in Dublin this afternoon after a series of meetings with Opposition representatives, trade union leaders and others, Commissioner Rehn said that Ireland has proven we can overcome adversity and that Europe stands by us.

"We all know that adjustment takes time," Commissioner Rehn said in an address to the institute of International and European Affairs.

"It also takes determined and sometimes painful decisions: it requires political courage and political and social dialogue."

However, he said Ireland has "strong economic fundamentals which have delivered economic successes."

"Taking the necessary structural measures to support fiscal adjustments will pay off in the medium and long term for both sustainable growth and job creation."

He said it was important for him to meet here in Ireland with political leaders and social partners to listen to their views on tackling the country's economic and social challenges.

Drawing parallels between the current economic crisis and that which beset his native Finland in the 1990s, Commissioner Rehn said the Irish were a "smart and stubborn people."

"Time and again you have proved you can overcome adversity. And this time you do not face the challenges alone. Europe stands by you," he said.

Earlier today during meetings with the Opposition the Commissioner appeared to leave the door open for a re-negotiation of the four-year deficit reduction plan.

Ollie Rehn has now concluded meetings with the Taoiseach, the Green Party, the Opposition and some social partners, among them business group IBEC, union leaders

All sides say he listened intently to their positions, although Sinn Féin told the Commissioner to go back and tell Europe that Ireland cannot cut its budget deficit to 3%by 2014.

“I and my colleagues Deputy Arthur Morgan and Mary Lou McDonald this morning informed the European Commissioner Ollie Rehn that Sinn Féin will not be part of any consensus that seeks to cut €6bn from the economy next year hitting low earners and vital public services hardest,” Caoimhghin O Caolain, Sinn Fein Dail leader said.

“We informed Commissioner Rehn that the 2014 target for reducing the budget deficit to 3% of GDP is completely unrealistic and unachievable.”

Fine Gael's Michael Noonan said the €15bn correction planned by the Government may not be set in stone for future administrations.

According to Deputy Noonan, Commissioner Rehn said Europe would see the €15bn figure as the "initial estimate" of what was required in Ireland, but it was negotiable on an annual basis as real events occur in the economy.

"He made no suggestion that it would be varied down, but he didn't make any suggestion that it would be varied up either," Deputy Noonan said.

Meanwhile Taoiseach Brian Cowen today said that the State's ability to fund itself will be put at risk if the proposed savings of €15bn are not made over the next four years.

Mr Cowen admitted the €6bn of spending cuts and tax hikes in December's Budget will have have a dampening effect on economic growth.

However he says the approach to reduce the budget deficit to 3% by 2014 is the correct one and the details will be published in mid-November.

The Taoiseach also said the measures will help to restore international confidence in Ireland: