Europe sets 2013 as budget deficit deadline

Tuesday 24 March 2009 17.52
European Commission - Five years to bring deficit below 3%
European Commission - Five years to bring deficit below 3%

The European Commission is to give Ireland until 2013 to bring its budget deficit into line with EU rules.

The Commission estimates that Ireland's deficit will be more than three times the EU's recommended limit this year.

Later today the Commission will approve the Government's plans to control its borrowings giving it five years to bring its deficit below 3%.

The Government is targeting a deficit of 9.5% of GDP this year, which is more than three times the level allowed under the stability and growth pact, and the highest in the EU.

High borrowing is causing the national debt to soar and it will break the EU target of 60% of GDP by next year.

The supplementary budget on 7 April will seek spending cuts and tax rises of between €4bn and €6bn, in an effort to meet these targets.