Arthur Morgan (Louth, Sinn Fein)
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Question 80: To ask the Minister for Finance if his attention has been drawn to the Economic and Social Research Institute quarterly economic commentary for the third quarter of 2010 that had grave doubts about the ability of Government to bring our deficit below 3% of GDP by 2014 without damaging the economy; and if he will make a statement on the matter. [41572/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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With regards to the 3% target by 2014 - this benchmark was agreed by all EU Member States and the EU Commission. Ireland is not alone in the need to reduce its deficit – some 24 of 27 Member States are in excessive deficit. Some of these countries have committed to reducing their deficit to 3% by 2012 or 2013. There is clearly a wide gap between what we are spending and our income, such a gap is not sustainable. What we spend on our public services must be funded by an efficient tax system. In the medium term we cannot borrow to fund day to day services. For every €1 billion of this gap we put off addressing, we have to borrow that €1 billion every year and pay interest on this borrowing.

The Deputy will be aware that last week the Government announced that a consolidation package of €15 billion will be required over the course of the next four years if we are to deliver on our deficit reduction target. A significant frontloading of the consolidation of €6bn in 2011 is deemed necessary and will underline the strength of our resolve in showing that the Government is serious about tackling the public finance difficulties. My Department now expects annual average real GDP growth to be 23⁄4% over the 2011 to 2014 period. These growth forecasts incorporate the impact of the post-Budget consolidation measures outlined in the Information Note on the Budgetary and Economic Outlook which was published on Thursday 4 November.

Further details on the nature of the adjustment for 2011 and the distribution and composition of the measures over the remaining years of the forecast period will be announced in the Four-Year Plan. In addition the Plan will outline a programme of structural reform, which will help to further restore competitiveness and support economic growth. The Plan will be published later this month.