Brian Cowen (Laois-Offaly, Fianna Fail)

First, the €6 billion adjustment is a judgment that the Government has had to make in the context of the full circumstances of our situation. I do not know if everyone took the opportunity to meet Commissioner Rehn earlier but, as the Deputy will know from his party spokesperson, the Commissioner has indicated the support of the European Commission for the front-loading of €6 billion as part of our moving down our deficit to 3% of GDP by 2014. The Government came out of the markets to prepare a budget and a plan to show a clear pathway to that 3% target. As the Deputy will be aware, there has been a lot of volatility in the markets and there have been wider European issues involved as well. However, I would like to make it clear that while everyone has come to assist and be of help to us, the responsibility for these matters lies with our own Government and our own Dáil at the end of the day.

Second, the difference of €19 billion in what we spend and what we are taking in has to be closed and that has to continue. I have stated on previous occasions that the adjustments we have made in previous budgets amount to approximately €14.5 billion and we expect that by the end of next year two thirds of the total adjustment to be made between 2008 and 2014 will be completed. It is true to say that a consolidation of €6 billion or any correction will have a dampening effect on growth potential in the economy but it is also true to say that if we do not make this level of adjustment, the ability of our State to be funded on an ongoing basis will be put at risk. No strategy is absent of risk but the very best judgment that we have made is the one that we have made.

As I understand Deputy Gilmore's position, he agrees to the target of 3% of GDP by the end of 2014, he believes that an adjustment of €4.5 billion would be more appropriate next year and he does not accept that €15 billion is the calculation for the adjustment based on growth projections that have been submitted. As we have said, if there is a better performance than that, the level of adjustment will not be of that order but we believe that level of adjustment has met, and can meet, the endorsement of wider international bodies and that is an important part of building credibility in the pathway to the 3% target.

However, it is also the case that if this country and this Parliament fails to make the necessary adjustments, then we put at risk the funding of the State after July of next year and what will happen then is that we will be faced with a situation where we will only be able to spend €31 billion. As I said earlier during Taoiseach's Question Time in reply to Deputy Ó Caoláin, who does not agree with this strategy, one cannot go on spending €50 billion when one is only taking in €31 billion. Being only able to spend €31 billion would involve a serious adjustment in the level of services that could be provided. No responsible government, therefore, could contemplate that approach. The approach we are taking is the one we believe in our judgment best balances the imperatives of making a serious consolidation in the coming year, of allowing for growth potential in the economy to continue and, at the end of next year, of being able to say that up to two thirds of the adjustment has been completed. I believe, taking all those considerations into account, that is the correct approach.

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