Finance Minister Brian Lenihan today told the Dáil the Irish
people will have to accept cuts in public spending and
higher taxes. He also said EU backing is of key importance.
a speech during a two-day debate on the economy, he said
there was a danger that foreign buyers of our bonds would
stop lending if we did not act soon to live within our
means. He said that if action were delayed, the problems
would not only remain but get worse.
The Minister for Finance said: "The
endorsement of the EU Ministers, the Commission and the ECB
will be of key importance in demonstrating to the markets
the soundness and credibility of our Plan."
On Tuesday, the Government said a fiscal adjustment of
€15bn over the four-year period 2011-2015 was required. A
detailed four-year plan will be published next month.
The Minister said the language used in
debating issues related to economics and the public finances
is often perceived by the general public as lacking in
clarity, directness and impact. "I therefore want to
state the Government’s position on its consolidation plan
simply and as follows:
The cost of the public services that
we are using is far higher than our current tax
Economic growth will not on its own
deliver sufficient revenue to close the gap for some
years to come.
This means that for the difference
between what we are spending and what we collect in
revenue has to be borrowed;
The cost of borrowing is high and
rising and if we do not act soon to live within our
means, the people that we are borrowing from may stop
lending to us;
If this were to happen, the continued
provision of an adequate range of public services and
social supports would be impossible to guarantee;
The Irish people will therefore have
to accept cuts in public expenditure and higher taxes.
Even though these measures will be
painful, we will continue to enjoy most of the
substantial increases in living standards that were
gained over the past ten years or so and they will
provide the basis for regaining what we have temporarily
Fine Gael's finance spokesman Michael
Noonan said things were bad, adding that
there was no growth, no hope and no
He said the 3% deficit target could
be achieved by a €9bn adjustment and
Fine Gael was not buying into the €15bn
figure announced by the Government.
He also said the Finance Minister's
and the Government's biggest problem was
that no-one believed them anymore and
that credibility had been lost.
Labour's finance spokesperson called
the current government 'pathetically
stupid' and said Fianna Fáil's pervasive
helplessness was killing the country.
Joan Burton also said a change of
government would make the bond markets
feel that Ireland is 'on the up'.
Finfacts Budget 2011 Page