Brian Lenihan Jnr (Dublin West, Fianna Fail)

It is of enormous benefit that the main political parties in this House share a common understanding of the extent of our difficulties and even if we disagree on how to solve our problems, our agreement on the amount of savings required sends a powerful signal to the rest of the world that we are able and willing to put our own house in order.

Today, I want to tell the Irish people that even though our economy is still in a weakened condition, and our self-confidence as a nation has been shaken, the Government's strategy over the past 18 months is working and we can now see the first signs of a recovery here at home and in our main international markets.

We have taken bold, decisive and innovative steps to manage our way through this crisis. In all our actions, our concern has been to protect jobs, to provide a functioning banking system and to return this economy to the path of sustainable growth. We have sought to do all of this in a manner that is fair and that protects the most vulnerable.

The measures we have taken have been commended by international bodies, such as the European Central Bank, the European Commission, the IMF and the OECD. They have also won the approval of the international markets. Tangible evidence of this is the reduction in our premium on borrowing in recent months.

We now have the confidence of knowing that our plan to return this country to prosperity is working. Yes, we have had to make some very difficult choices in framing today's budget and in doing so, we have tried to be as fair as possible. However, by taking the difficult but necessary measures now, we will rebuild our nation's self-confidence here at home and our reputation abroad.

NEXT STEPS TOWARDS RECOVERY

The Government over the past 18 months has made budgetary adjustments of more than €8 billion for this year. Had we not done so, the deficit would have ballooned towards 20% of our annual wealth, a level at which the very financial survival of this country would have been at risk. As a result of these decisive actions, we are now in a position to stabilise the deficit.

A total of €4 billion is the scale of adjustment that we planned for 2010 in the supplementary budget where we set out details to reduce the deficit over the coming years. The European Commission approved that plan but recently recommended a revised deadline of 2014 by which to reduce our deficit below 3% of GDP. We welcome this revision, but it does not change what needs to be done in this budget. The amount of €4 billion is still the right target and our strategy is on track.

In this next phase of the Government's plan we must stabilise the deficit in a fair way, safeguard those worst hit by the recession, and stimulate crucial sectors of our economy to sustain and create jobs. The worst is over.

See this speech in context