Ireland Needs `Sustainable' Finances for Recovery, Finance Minister Says

Ireland’s Finance Minister Brian Lenihan said the country must restore its competitiveness and ensure its public finances are “sustainable” as it emerges from the worst recession in its modern history.

“I am committed to delivering budgets for 2011 and 2012 which continue to bring expenditure and revenues toward a sustainable balance,” Lenihan said in a speech delivered today in Cork, in the southwest of the country. “Neither the bond markets nor our major European Union partners would tolerate any slippage on our part. We must be resolute in our determination to do what is right.”

Ireland suffered the worst recession of any developed country since the Great Depression as a decade-long housing boom ended and the financial system came close to collapse, helping push the country’s budget deficit to 14.6 percent of gross domestic product last year, the widest in the European Union. Ireland will almost halve its deficit next year as the cost of bank bailouts decline and spending cuts and tax rises take hold, the Economic & Social Research Institute said last month.

Bank bailouts for lenders including Allied Irish Banks Plc and Anglo Irish Bank Corp. were based on advice from institutions including the International Monetary Fund and the European Union and were necessary to “ensure that a stable financial system is established,” Lenihan said. Costs for doing business must be “reduced wherever possible,” he said.

To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net

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