Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin have ruled out a give-away budget in October.

Speaking at the National Economic Dialogue forum in Dublin Castle, Mr Noonan said there was significant space to take on-board tax reduction and spending measures.

However, he said the budget no longer depended on the amount of money available, rather the amount of money the Government was allowed to spend under new European fiscal rules, which have been incorporated into Irish law.

He said that was a good thing as it would avoid another crash.

Asked whether it would be better to keep interest rates high to keep banks profitable before they are sold, Mr Noonan said banks would be able to reduce their underwriting costs if people switched to fixed rate mortgages - and could then give better value to customers.

He said there were reductions of between 0.75% and 0.8% to be found, which would throw up savings on a sizeable mortgage.

He noted that the Central Bank and the ECB had advised the Government not to legislate to fix rates.

Asked about comments by IMF Director Christine Lagarde about Greece, Mr Noonan noted that she had participated fully in negotiating the Greek deal.

He acknowledged that while a nominal haircut was not necessary, re-profiling was and Ms Lagarde was simply repeating what was in an IMF submission a week ago. 

Meanwhile, Mr Howlin said the hallmark of the Government had been prudent management of the economy and that was not going to put at risk.

He acknowledged that the Irish Fiscal Advisory Council had recommended a maximum of €700m for tax cuts and spending hikes, compared to the €1.5bn projected by the Government.

However, Mr Howlin was confident the Government would fully meet its legal requirements within the €1.5bn parameter it had set.