European Commissioner for Economic and Monetary Affairs Olli Rehn has called for political consensus to back the Government's four-year economic plan and the Budget.

Mr Rehn said it would be a great benefit to Ireland if a broad political support for the necessary consolidation measures and structural reforms now required could emerge and be developed in spite of party political differences.

The Commissioner met Minister for Finance Brian Lenihan and senior finance officials at Government Buildings this evening.

The meeting came as the Government finalises the detail of the Budget to be announced next month and the four-year strategy aimed at reducing the budget deficit to 3% of Gross Domestic Product by 2014.

Minister Lenihan has confirmed that the Government would be seeking to reduce the deficit next year by €6bn through spending cuts and tax increases.

The €6bn adjustment is the Government's first step in its efforts to bring the deficit in line with EU targets by 2014, but it is double the amount Mr Lenihan signalled in last year's Budget.

Mr Lenihan says he anticipates that the package of measures will reduce the debt to GDP ratio to between 9.25% and 9.5% next year.

The Government has decided that a consolidation package of €15bn will be required over the next four years, if it is to achieve its 3% deficit target by 2014.

During his two-day visit, Mr Rehn will also hold separate meetings with the Opposition parties, as well as with business and union representatives.

Cost of borrowing rises

Ireland's cost of borrowing continued to rise and the interest rate demanded by investors to lend money to Ireland for ten years stood at 8% this afternoon.

Irish banking stocks all saw big losses today again due to concerns about the state of the economy.

Bank of Ireland shares were down over 9%, while AIB dropped 3% and Irish Life and Permanent lost 18%.

Lobby group Social Justice Ireland said that Commissioner Rehn is refusing to meet its representatives.

It said Mr Rehn is insulting the poor and vulnerable in society by not meeting its representatives.

Elsewhere, Fianna Fáil TD for Cork North-Central Noel O'Flynn has said he will resign the party whip and vote against the Government, if it proposes cutting the old-age pension in the Budget.

Mr O'Flynn said he believed there were six or eight TDs in the party who would have difficulty in supporting such a cut.