The European Commission has given 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.
The European Comission today approved the Government's plans to control its borrowings, allowing the Government a five year period to bring its deficit below the 3% limit.
This is an exceptionally long period to correct the country's so-called excessive deficit, but then the Irish problem is exceptionally large.
The Government is targeting a deficit of 9.5% of GDP this year, more than three times the level allowed under the stability and growth pact, and by far the highest in the European Union.
Such high borrowing is causing the national debt to soar, and it will break the other EU target of 60% of GDP by next year.
The supplementary Budget next month will seek spending cuts and tax rises of between €4-6 billion, in an effort to meet these targets.
Now that the Commission has given its endorsement to the Government's plans, it becomes an international benchmark against which to judge the Government's performance in the months ahead.
The Commission is also to give Greece until 2010 and France and Spain to 2012 to get their budget deficits back under control.
'National budgetary positions in the EU and elsewhere have deteriorated considerably in the last year and are set to deteriorate further on account of the economic crisis,' EU Economic Affairs Commissioner Joaquin Almunia said. '
'To limit the costs of the debt for generations present and future, it is crucial that governments devise an adjustment path whereby they commit to correct public deficits from the moment the economy starts to recover,' he added.
With Greece's deficit estimated at 3.7% of output this year, the commission gave Athens until next year to bring its budget gap in line with the EU limit. France, with a deficit estimated at 5.6% this year, and Spain, with a deficit of nearly 6%, were both given until 2012 to cut their deficits.
Britain already had a deadline of April 2010 for bringing its deficit under control, but the date was pushed back to April 2014 with the deficit currently running at 8.2%.
The five countries' other EU partner governments have to approve the deadlines for them to become binding. If a euro zone country flaunts the rules over an extended period, it could in theory face hefty fines although no country has yet met that fate. Non-euro countries such as Britain are not subject to fines.
