Cabinet meets at Farmleigh

Government ministers have been meeting at Farmleigh to discuss ways of securing €3bn in savings in the next Budget.

The Taoiseach said afterwards that ministers had a very good discussion, but that it was the first of a series of meetings to plan December's Budget.

Brian Cowen stressed that domestic spending was an important factor in growing the economy and said that promoting confidence was a key task.

Finance Minister Brian Lenihan said that growth had resumed but the public finances still needed to be addressed.

Mr Lenihan too insisted that boosting confidence was an important factor in building jobs.

On cutting expenditure, he said that all the recommendations of the McCarthy Report had political implications, but that they would be worked through by ministers.

Minister for Justice Dermot Ahern also said the Cabinet had reviewed the situation but no decisions had been made.

He said the Cabinet felt Ireland has reached the bottom of its economic difficulties and there were hopeful signs for the future.

'We have to build on that and give people confidence', he added.

Mr Ahern said the level of savings had gone up from around 4% to around 12%. He said what we need to do as a nation is to get the people who are saving their money to spend it in the economy.

The Government wants to preserve jobs, he said, and would look at areas 'where we can try to give people an added stimulus to get back into employment'.

Ministers admit tough decisions must be taken

This morning, Government ministers admitted that tough decisions must be taken to deal with economic realities.

Minister for Culture, Sport & Tourism Mary Hanafin said today's meeting was an important part of the budgetary process. She said it is, as yet, too early to make decisions, but that tough decisions need to be made.

Ms Hanafin insisted the decisions must happen in the context of creating employment.

Minister for Agriculture Brendan Smith said a lot of decisions need to be made and detailed discussions will take place between now and Budget day.

Asked if the outcome of today’s meeting and the next Budget would mean pain for the public and Government departments, Green Party Minister Eamon Ryan said 'let's see, we will get there'.

Fine Gael has said the Government should consider cutting expenditure rather than introducing more taxes to make savings.