Rehn: Ireland needs to stick to its budget commitments

The EU's Economics Chief Olli Rehn has hinted that he does not want Ireland to ease off on its Budget adjustments.

Mr Rehn said Ireland needs to keep lowering its budget deficit in line with the commitments under the EU-IMF deal.

The call comes as the Government prepares to decide on the scale of the adjustments to be made in October's Budget.

Mr Rehn says he is not unduly concerned about the official figures which put Ireland back into recession.

He said "The cost of borrowing for the Irish government did not rise when the economic figures were released, so there's no reason to be worried about the prospects of getting out of the bailout."

However, the economics commissioner said the gap between the amount the Government takes in, and the amount it spends remains wide, and needs to be addressed.

He said: "Ireland needs to maintain its fiscal consolidation in line with its commitments."

This could be a veiled reference to the original plans for €3.1bn in adjustments this October.

The Government is still trying to decide whether to plough ahead with a full €3.1bn, or whether it can meet its official deficit targets with a slightly smaller burden on the public.