Cowen has not ruled out revisiting Croke Park deal

TAOISEACH Brian Cowen has not ruled out revisiting the Croke Park agreement, but he indicated that he will wait and see if the deal yields the kind of public sector savings he needs before revisiting it.

And senior EU officials have come out in favour of not cutting much more from public spending but concentrating instead on raising taxes to save at least €17.5 billion on spending over the next four years.

Mr Cowen said the Government will prepare the four-year budget plan taking into account the agreement with unions for no forced redundancies as well as no further pay or pension cuts.

“We will approach this on the basis of trying to do it in a way that is consistent with the agreements we have reached thus far. We have to discuss it and come to final positions on it and listen to other people and other parties to the agreement in relation to that,” he said.

He refused to say if he would consider reopening the Croke Park agreement reached with the public service unions last April. He said the Government’s focus was on preparing the budgetary plan to show how it will reduce the deficit from 32% to 3% in four years’ time.

The agreement was subject to “no currently unforeseen budgetary deterioration,” and some economists and employers are arguing that the €2bn increase in borrowing costs constitutes such a deterioration.

The Taoiseach also refused to discuss figures the Government will try to cut from the deficit this year, but the lower growth forecast of 2.4% for next year, down from 2.8%, from the Central Bank, indicates it will need to cut even more from the budget.

The ESRI estimated that with a 3% growth the state could cut €4bn from the budget and increase this to €4.5bn over the following three years. Economist John FitzGerald acknowledged this might have to be higher given the lower growth forecast.

The only area the Taoiseach was willing to commit to was corporation tax, which he reiterated would not be increased.

The EU will be working closely with the Department of Finance in drawing up the budget details showing how exactly the necessary savings will be made.

An official, asked about the budgetary plan, said: “Measures have to be spread between revenue and expenditure and in expenditure a lot has already been requested from the Irish citizens. The burden should be spread.”

Asked about Fianna Fáil TD Mary O’Rourke’s comment that an election before Christmas would be the best option, the Taoiseach said: “I can assure you there is nothing further from my mind.”