ESRI calls for Budget cuts to exceed €3.6bn

The Economic and Social Research Institute (ESRI) is urging the Government to make Budget savings of more than €3.6bn to reduce the deficit more quickly.

The ESRI is also calling for details of the planned measures to be released before December to give greater certainty to households and businesses.

In its latest quarterly economic commentary, the think tank said that while the collapse in the Irish economy had bottomed out, the US and UK recoveries were faltering.

The ESRI called on the Government to go beyond the EU/IMF target of €3.6bn, with research professor Joe Durkan recommending tax hikes and spending cuts of up to €4bn.

"I have this fear that some adverse event will happen and you'll suddenly find you have to spend a pile of money. Then you don't meet the targets (and) then you're in trouble."

Echoing a recent call from the Central Bank, the economist said he believed revealing budgetary plans early would instil some certainty.

"Not doing that creates all this uncertainty and that uncertainty is just terrible from the point of view of decision-making," he said.

"Part of government's function is to reduce the uncertainty that faces its citizens."

Meanwhile, he said that while there was no sign of a major recovery in Ireland, the big declines of recent years were over but the world economy is now show signs of stagnating.