Cowen refuses to be drawn on scale of budget cuts

TAOISEACH BRIAN Cowen refused to be drawn on the scale of the cuts in December’s budget.

He said the figure was being worked on by the Government.

“The Government is in the midst of estimates relating to the 2011 budget, and we are now having to bring this other requirement of a four-year budgetary framework . . . because that is in the interests of the country,’’ he said.

Last weekend, the Government refused to rule out cuts of more than €4 billion if it was to reduce its deficit target by 2014.

Mr Cowen was replying to Fine Gael leader Enda Kenny, who asked about the “level of cuts” being considered by the Government.

“Is it €3 billion, €3.5 billion, €4 billion . . . or beyond €4 billion?’’ said Mr Kenny.

The Fine Gael leader asked how any political party or the Government could put forward its plan for the 2011 budget if did not know what the scale of the cuts would be.

Fine Gael, he said, would present its view of what the strategy should be, as it had done previously.

Mr Cowen said the Government had to ensure that the markets generally, and more importantly the people, could see what the real options were for the country so as to reduce the deficit to 3 per cent.

“That is an obligation on this or any other government during that period,’’ he added.

What would be brought forward “was needed to ensure that there is a credible pathway set out by this country as to how we reach that deficit reduction,” Mr Cowen added.

Mr Cowen said that, contrary to what had been suggested by a member of the House, the taxpayer would not be “hit for €4 billion next year . . . every year for the next 10 years’’.

Mr Kenny said people had been told last Thursday that the cost of the failure of the Government’s banking strategy was €50 billion.

There would now be a need for a much tougher budget to be introduced.

The international markets did not want to lend money to Ireland, unless at exorbitant rates, because it did not believe the Government’s growth plan for the country, said Mr Kenny.

“I have to say, Taoiseach, that the announcements made last week have hundreds of thousands of people shocked and confused and very, very angry,’’ he added.

“They felt that having taken salary cuts, pension levies, overtime cutbacks, reductions in services, they were really making a contribution towards sorting out the financial crisis and the economic situation your Government has led the country into.’’

The taxpayer and the citizen would have to pay directly for the failure of the Government’s banking strategy, he said.

Mr Cowen said investments had been made in AIB and Bank of Ireland and a return would be obtained in due course.

There was an “appalling situation” of an estimated €29.3 billion relating to the orderly wind-down of Anglo Irish Bank over a long period of years.

The budget issue was a separate matter, he said, because there was an €18.5 billion gap.

“That gap has to be dealt with. That is the context in which we are operating,’’ Mr Cowen said.

Ireland had to come forward with a four-year budgetary strategy as a member of the euro, and in the interests of building and maintaining confidence in the country’s capacity to deal with the situation.

This, said Mr Cowen, would be the same framework “for whosoever has the honour and privilege of serving in government between now and 2014”.