Government May Roll Out €4 billion Of Cuts

The Government's next austerity budget could see over €4billion in cuts this December.

The Finance Minister Brian Lenihan has refused to rule out the massive cuts which will be made to reduce the current deficit by the 2014 deadline from the EU.

Although recent economic activity measures have been encouraging, such as a record increase in exports, the impact of deflation has been higher than expected.

The Department of Finance said the budget's scale would depend on the latest economic figures and its projections as to what percentage of national income the deficit would reach.

They refused to draw a line on the upper limit of the cuts and would not specifically rule out the possibility of cuts of more than €4 billion, or even of €4.5 billion, in the budget.

Jack O'Connor, Congressional President of worker's union SIPTU, said the Government's declaration of their intention to intensify the austerity programme beyond the €3bn they earlier announced for budget 2011 was simply to "appease the perceived sentiment of the financial markets".

"Seemingly we must prove our determination to repay the debts incurred through the profligacy of those at the top of our society by crucifying those at the bottom. There might be some rationale in it if it did what it says on the tin, but it clearly does not.

"Current debt servicing as a percentage of tax revenue is less than half it was in the 1980s and only one-third as a percentage of GNP or GDP. Today we care calling for an end to the economics of failure."

Mr Lenihan said in early September that overall savings in Government expenditure in 2011 would be more than the €3 billion projected in the Stability Programme update last December.

But exchequer figures for the end of September, which are due to be released today, are expected to show the budget deficit is worse than previously forecast, underlining the need for deeper cuts.

(DW/GK)