Government 'risks making the same mistakes that led to financial crash'

The State’s financial watchdog has said that the Government risks repeating the same "mistakes" that led to the financial crisis by failing to stick to budgetary guidelines.

Government 'risks making the same mistakes that led to financial crash'

The State’s financial watchdog has said that the Government risks repeating the same "mistakes" that led to the financial crisis by failing to stick to budgetary guidelines.

The Irish Fiscal Advisory Council (IFAC) said that the Coalition’s plans to reduce the deficit by 0.3% next year are not in full compliance with the Budgetary Rule or the EU Stability pact - which require a change of 0.6%.

IFAC said that it accepts that the Government has not followed its advice "to the letter" in the past - and it has significant concerns about Ireland’s fiscal policy into the future.

Council chairman, Professor John McHale, said that the failure to follow financial rules could see the mistakes of the past repeated.

"The mistakes tend to get made in good times and I think the crisis is not very far behind us that we're already not fully respecting the framework," he said.

"As we move into better times, and I certainly hope we will, it becomes less likely the framework will be respected.

"And then the risk of making the mistakes just grow."

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