Minister for Finance Brian Lenihan has said he agrees with Central Bank Governor Patrick Honohan that there is scope for this or any future Government to renegotiate elements of the EU-IMF rescue package.

Mr Lenihan was referring to comments made by Mr Honohan earlier today, in which he said that he was 'confident' that any new Government would receive a sympathetic hearing from the EU and IMF if it were to propose changes to the four-year plan which would have the same effect on the deficit.

'I agree with Professor Honohan that there is an opportunity for this Government or for any new Government to substitute alternative measures within the programme where they are as economically efficient and of equal fiscal effect,' the Minister said in a statement. 'This has always been the case.'

But he said that 'whether, for example, the Labour Party's plan for an additional €2.5bn of tax increases over what is pencilled in the National Recovery Plan would be viewed as economically efficient (was) not clear.'

Mr Lenihan said that the size and speed of the budgetary adjustment was not open for discussion.

'The position in relation to the interest rate charged is different,' Mr Lenihan said. 'The interest rate for funding from the IMF and the various EU funding lines were determined by a common approach for any borrower.

'Accordingly, any changes to these rates cannot be negotiated for Ireland in isolation and must be seen in the wider context.

'We must bring realism to the debate about our financial difficulties.

'I agree with Governor Honohan that the debate must bring 'a clearer understanding of what is possible and what is not possible to be done.'