Budget black hole has doubled

Cross-party talks between the Dublin government and the two largest opposition parties are to go ahead despite the revelation that the 26 County budget deficit is heading for 15 billion euro -- double the previous worst estimate.

The revelation emerged as opposition finance spokespersons were briefed on the scale of the budget crisis, although the exact figures were not made public.

Various “worst-case” and “best-case” scenarios were outlined to Fine Gael, the Labour Party and Sinn Fein on Monday during “confidential” briefings with the Department of Finance.

After imposing secrecy conditions on the figures, the Dublin government is now under intense pressure to come clean with the public on the full scale of the Exchequer crisis.

Cuts and taxes of up to six billion euro are understood to be planned for 2011 alone, with health services set for cuts of up to a billion euro, according to Minister for Health Mary Harney. She said this afternoon there was “no easy way to take that kind of money out” of the Health Service Executive (HSE), but that salaries would not be cut.

Today, Taoiseach Brian Cowen admitted the numbers were more serious than previously admitted, and set the scene for budget cuts at a previously unimagined level.

“It’s important we not get into specific figures but a significant correction has to be made over and above what was originally considered (in) the 2010 perspective for the years ahead,” he said.

Sinn Fein, which has been excluded from the ‘national consensus’ talks, said it was not interested in being part of any consensus for cuts. Finance spokesperson Arthur Morgan TD was responding to Green Party Minister Eamon Ryan’s statement that it was “a pity” Sinn Fein did not agree with the coalition’s economic strategy so it could be involved in the talks.

“Green Party Minister Eamon Ryan has a brass neck,” said Morgan. “He knows very well that his party leader John Gormley invited all the party leaders, including Sinn Fein’s Caoimhghin O Caolain, to talks without pre-conditions.

“Caoimhghin O Caolain responded to Minister Gormley and accepted his invitation to talks without pre-conditions.

“However, the Taoiseach Brian Cowen has now set the pre-condition that all parties must sign up to the target of reducing the budget deficit to 3 per cent by 2014.

“Sinn Fein will not be signing up to that target which is totally unrealistic and which this Government is preparing for by slashing and burning the Irish economy.”

The Irish Congress of Trade Unions David Begg also called on the government to implement a longer period of adjustment to balance the budget.

Begg warned of the potential damage to the economy of a short, sharp, shock - which he said would only stunt growth and prolong the downturn.

Sinn Fein also warned that the level of cuts to the health services threatened by Minister Harney would “cost lives”.

“Already patients are facing dangerously long waiting times for even preliminary examinations by consultants, as well as huge waiting lists for hospital treatment and overcrowding in Accident and Emergency departments,” said Mr O Caolain.

“Services have been slashed across the health system and now we are threatened with loss of services on a scale previously unknown.

“This threat comes from a Minister and a HSE that have presided over massive waste, above all in State subsidies to the private for-profit health sector.”

Urgent Appeal