Bruton calls on government to withdraw budget

The leader of Fine Gael has called on the government to withdraw its budget. John Bruton made the call following a warning from the Central Bank that the budget, which was introduced earlier this month, was a threat to the competitiveness of the economy. John Bruton says that the government and the Central Bank are now on a collision course following the declaration by the bank that this month's budget is inappropriate.

In its winter statement, the Central Bank criticised tax cuts introduced in the budget and said that, together with spending increases announced in advance of the budget, they would provide a dangerous stimulus to the economy. This, the statement said, would speed up inflation and in the medium-term hamper the economy's strength in protecting itself from any external shocks.

In a statement issued last night, the Fine Gael leader maintained that the current stand-off was unprecedented and could not be more serious. Deputy Bruton warned that inflationary pressures would be increased by further government concessions which might be made in an effort to hammer out a new national pay deal. He accused the government of financial recklessness in an attempt to buy back popularity. He added that, because of what he described as the socially unjust nature of the budget, the only way to resolve the situation was to start from scratch, a move for which there is no parliamentary precedent.