Brian Cowen (Laois-Offaly, Fianna Fail)

I have given the returns figure — it is €5.759 billion at the end of February 2009 as opposed to €7.562 billion at the end of February 2008.

There is a strategy in place which we have outlined to the European Commission, as required once we exceed the Stability and Growth Pact 3% deficit limit. We have indicated that between now and 2013 it is our intention, through a combination of tax increases and expenditure savings, to reach a situation where €16.5 billion will be taken out of the equation. The gap in the original end of year Exchequer returns is €55 billion in expenditure and €37 billion in taxation. This is the third month of the year and tax revenues are already under pressure. It seems there could be a shortfall in revenues of between €2.5 billion and €3 billion based on the figures if the profile were to continue for the remainder of the year.

The decision taken by the Government in respect of the figures which have emerged today indicates clearly that we must stick within the fiscal strategy we have set for ourselves. Further measures must be taken to keep within the 9.5% deficit figure we have set ourselves for 2009. We have indicated in the documents to the European Commission the further savings that must be made in future years. I have indicated to the House that we should try to set a three year parameter to manage the situation in so far as it is possible to predict it, as the Deputy said, in a downturn which continues and which is deteriorating. The global recession is having an impact everywhere, including the European and USA economies, among others. We have made the decision that we will make whatever adjustments are necessary to meet the emerging deficit in this year's figures by the end of the month. We received the figures today and must consider them and produce a plan to deal with them. That is what the Government intends to do. We are indicating that we will make decisions at the end of the month.

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