Michael Noonan (Limerick City, Fine Gael)

The Irish fiscal advisory council in its first fiscal assessment report published in October stated that it sees a strong argument for strengthening the budgetary consolidation effort and targeting a general government deficit of 1% of GDP by 2015, as compared to the target of having a deficit below 3% by that year. In that regard, the council recommended the implementation of a €4.4 billion budgetary adjustment package in 2012.

Under the terms of the EU-IMF programme, the general government deficit must not exceed 8.6% of GDP. The recently published medium term fiscal statement estimates that, based on the current macroeconomic and fiscal assessment, an adjustment of €3.8 billion is required in order to achieve that target, one to which the Government is absolutely committed. While cognisant of the views of the council, the Government is of the view that adhering to its commitment to reduce the deficit to below 3% of GDP by 2015 and delivering on the EU-IMF programme commitments is what is needed.

In striving to restore sustainability to the public finances, we must also be mindful of protecting the emerging economic recovery and seek to strike the right balance between the two. This balancing act is difficult but we believe we have struck the right balance as do the EU-IMF troika.

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