27.10.201011:20:00UTC+00Irish PM Says Major Correction Necessary To Achieve Fiscal Stability

Ireland's public finance position still requires a major correction to put it on a sustainable path, Prime Minister Brian Cowen said on Wednesday.

He told parliament that his government has decided an overall budgetary adjustment of EUR 15 billion over the next four years in order to achieve the deficit target of 3% of GDP by 2014.

The decision is based on a working assumption that the budgetary adjustment will be somewhat front-loaded in 2011 and that it will be weighted more towards reductions in spending than tax increases.

"It is severe, but it is a necessary next step to economic recovery," Cowen said.

Last week, the country's Economic & Social Research Institute also said Ireland needs savings of up to EUR 15 billion to achieve a budget deficit target. The Dublin-based think tank said the required savings is twice the sum that was under discussion at the time Ireland and the European Commission agreed to the 2014 deadline.

Furthermore, he said the Irish economy is emerging from the recession, with growth returning and the prospect of stronger growth next year.

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