Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

It is a fine judgment. The main purpose of this budget is to position us to exit the bailout programme. We are being watched by the international community and the markets. If we just cut it to 5.1% and bring it in as a deficit, there is a risk of drift. These matters are never that precise. As the year goes on one could come out on the wrong side of any storm that blows up. Accordingly, it is prudent to build in a buffer, and that is why I aiming for the high fours, without being more precise than that.

Based on the figures published yesterday, we are on track to reach the 7.5% deficit target for 2013. Built into that figure are the up-front once-off costs of the promissory note. While we will have a deficit of 7.5% on 31 December 2013, on 1 January 2014 it will be about 6.8%, because those costs fall out. As one works one's way down through it, one makes the consolidation. It is prudent to get into the high fours and deliver a balance or primary surplus. That will convince the markets that they can lend money to us at reasonable interest rates. Accordingly, we would be out of the programme.

See this speech in context