Fine Gael calls for clarity on €2bn deficit

FINE GAEL finance spokesman Richard Bruton called for clarity on the EU’s attitude to the Government’s handling of budgetary matters.

He said Minister for Finance Brian Lenihan should give the Dáil a categorical assurance the EU had agreed meeting the 3 per cent deficit by 2014 would not result in the €2 billion being raised from either spending or taxation.

Mr Lenihan said he was not suggesting he already obtained such an assurance. “I am saying to the Deputy that the target is perfectly attainable without taking these matters into account,’’ he added.

Pressing the Minister on the issue, Mr Bruton said: “Either we have to meet this €2 billion per year for the next 10 years from taxation and from cuts in spending or we add it to the debt off-balance sheet and it does not affect the budgetary targets.”

Mr Lenihan said the EU had not even raised the issue with the Government. Mr Bruton said it was a huge issue and clarity was required at a very early date.

“The Minister is not giving clarity,’’ he said. “He is just saying it is not in his thinking. We need assurances that the EU accepts his approach so we can frame realistic budgetary proposals.’’

Earlier, Mr Lenihan said work was ongoing on the adjustments necessary in the 2011 budget. While difficult decisions would be necessary, the Government was committed to the implementation of the fiscal consolidation plan set out last year, he said.

Mr Lenihan added that the report of the special group on public sector numbers and expenditure programmes; the work currently under way regarding local authorities; and the report of the Commission on Taxation would also have a role in the determination of future budgetary policy.