Rehn: Budget 2011 must be passed

The European Commissioner for Economic and Monetary Affairs has said again that it is essential that Ireland passes Budget 2011 next month, "in the timeline foreseen".

Olli Rehn said any delay in the process would only create more uncertainty.

He made the comments following a meeting in Strasbourg this morning with all of the Irish MEPs, at which Ireland’s economic crisis was discussed.

The Commissioner welcomed the publication tomorrow of the Irish four-year plan - the “cornerstone” of any recovery programme – and reassured the MEPs that the Commission is convinced the “fundamentals” of the Irish economy are sound. But he made clear he would prefer a swifter 2011 budget launch date than the planned unveiling on December 7.

In Brussels, a Commission spokesman emphasised the Commissioner’s concern: “Every day that passes brings more uncertainty,” he said.

“But the Irish economy has strong fundamentals, and decisive action should restore robust and sustainable growth, which will safeguard economic and social cohesion.”

Once the four-year plan is presented and the Irish budget for 2011 published, the experts scouring the books in Dublin will be looking for a combination of “structural reforms” coupled with “fiscal consolidation” – budget cuts – as the basis of a recovery programme justifying a bailout accord.

But the spokesman emphasised: “There are still no figures for a bailout. I keep seeing firm figures in some newspapers, which is surprising as there are no figures, and I think some papers are going to have to make corrections.”

Socialist Party MEP Joe Higgins walked out of the meeting after just two minutes when he was told the briefing was confidential.

Fine Gael MEP Sean Kelly said Commissioner Rehn wants the Budget measures adopted as a matter of urgency:

"He said it was essential that it be done, because a delay would create more uncertainty and they want to avoid that situation…I'm quite sure that we will get a Budget passed, by whoever, as soon as possible," said Mr Kelly.

Mr Rehn also reassured Irish MEPs about Ireland’s determination to maintain its low corporate tax rate, according to the Fine Gael MEP Gay Mitchell.

Mr Mitchell said Commissioner Rehn was very supportive of Ireland’s desire to ensure its corporate tax rate was not interfered with.

"He told us he had already told finance ministers that this was not the time to raise the issue (of corporation tax)," he said.

Finance Minister Brian Lenihan stressed the need to pass the budget.

“We’re working on the budget,” Mr Lenihan said.

“This budget is needed for Ireland. We need to pass this budget. We need to publish our plan tomorrow, which we will be doing.

“The plan has been finalised, the budget will be introduced and the necessary funding for the budget will be obtained.

“They are the priorities for this country at present.”

Asked if Taoiseach Brian Cowen would lead Fianna Fáil into a general election, Mr Lenihan said: “Of course.”