The Government should not use the €1bn saved by the promissory note deal to "soften" the next Budget, according to an economist with the Economic and Social Research Institute.

Research Professor John FitzGerald said the Government should go ahead with its plans to make €3bn in cuts and savings.

It should then possibly "ease off" on the proposed €2bn in cuts for the following year.

Prof FitzGerald said the promissory note deal will end austerity "slightly earlier" than it would have otherwise.

Speaking on RTÉ's Morning Ireland, he said if plans to make €3bn in cuts and savings next year go ahead and ease off in 2015.

He said: "I think that'll be easier. I think get it over with as soon as we can and then take the benefit by easing off, and it could be that in 2015, we be almost out of the woods."

His comments came as a report by economists from ten European forecasting and research bodies said that eurozone growth will be slow this year, but it could return to growth of more than 1% next year.

Prof FitzGerald also said that austerity was not working across Europe.

He said the lack of a co-ordinated fiscal policy in Europe, with Germany introducing cuts last year, and France and the Netherlands introducing dramatic cuts this year, was preventing the eurozone from returning to growth sooner.

He said that Ireland was "still not out of the woods" and it was still vulnerable to global financial downturns.

Elsewhere, Minister for Transport Leo Varadkar has said Ireland must meet the Budget target before people start talking about how the saved €1bn will be re-allocated.

Speaking on RTÉ Radio, Mr Varadkar said the money is €1bn a year less that the Government needs to borrow, not €1bn more it has to spend.

He said the deal means the Government has some flexibility, but that could be wiped out very easily with unexpected bills, overspends in Government departments, certain growth rates and Budget factors.