European Union finance ministers have held extensive discussions in the Czech Republic on the Irish economic situation, and have endorsed the excessive deficit procedure proposed by the European Commission.
The EU Economics Commissioner, Joaquim Almunia, said they fully support the target of a deficit of 9.5% of GDP this year, even though more recent figures suggest the deficit will exceed this figure.
Almunia said the Commission and euro zone finance ministers were very happy with the way the Irish Government has assumed its responsibilities in starting to tackle the huge budget deficit.
He said they endorsed the Government's strategy for bringing borrowing down over the next four years, and were looking forward to hearing the budgetary measures that will be announced next week.
But he again said the Irish borrowing target - agreed with the Commission - was 9.5% of GDP, even though Irish politicians have been indicating for the past two weeks that 10% or 11% was more likely.
Following a meeting, European Central Bank President Jean-Claude Trichet told journalists that the Irish Government 'is aware of the grave problem' facing the nation.
Asked by reporters if the euro zone could do more to help hard pressed governments like Ireland, Trichet said Irish banks were able to access unlimited amounts of cash from the ECB, and any current account deficits were covered by virtue of being in the single currency.
A slightly annoyed central bank chief said these were considerable benefits of the euro that the Irish should not overlook.
The Prime Minister of Luxembourg also expressed annoyance that his country, along with Belgium, Austria and Switzerland, were the only European states named on a so-called grey list of tax havens issued by the OECD.
