Ireland doubles its budget target to €15bn as outlines push for austerity

THE Irish government has doubled the amount of money it reckons is needed to bring the country’s deficit under control to €15bn (£13.1bn) over the next four years.

That is twice the level outlined in last year’s budget.

“The key reasons for the significant increase from the figure announced in the 2010 budget are lower growth prospects both at home and abroad and higher debt interest costs,” the government said in a statement sent via e-mail yesterday.

The announcement followed two days of cabinet discussions on how Ireland can get the worst budget shortfall in Europe back within a limit of three per cent of gross domestic product (GDP) by 2014. Further details will be set out in a four-year plan next month.

Speaking to national broadcaster RTE, Minister for Justice Dermort Ahern said the €15bn figure was based on a projection of average growth of 2.75 per cent per year over the next four years.

“It’s based on the fact growth both internationally and domestically is no longer going to be as good as what we expected this time last year,” he said.

Finance minister Brian Lenihan forecast growth of 3.3 per cent for 2011 when he unveiled the 2010 budget. But economists polled by Reuters expect 2.8 per cent and the central bank has said its forecast of just 2.4 per cent is in danger of being trimmed.

Ahern said the government has yet to decide what proportion of the cuts would be front-loaded into 2011.