Belfast Telegraph

Spending review 'serious change'

Taoiseach Enda Kenny has said a six-month government spending review marks a serious change in how taxpayers' money is treated.

The departmental audit was launched as a high level delegation from the International Monetary Fund and Europe sat down with ministers for the first time as part of their ten-day mission to Ireland.

And the meetings were held on the back of worsening forecasts for the economy with 2011 growth rates cut buy by half a per cent to 0.5%.

Under pressure over 2,000 job cuts at Allied Irish Banks (AIB), the poor economic assessment and last week's interest rate hikes, Mr Kenny said the IMF was on Ireland's side over the cost of the 85 billion euro bailout loan.

"The IMF themselves have recognised the validity of the government's call for a reduction in the interest rates, which would be important but which is only part of the evolution of discussions that are taking place here," he said.

Sinn Fein president Gerry Adams said the IMF's decision to cut its growth forecast showed the bailout was a disaster for Ireland.

"Yet Taoiseach, at every turn your Government recommits to this deal and even worse than that, Labour and the Labour leadership recommit at every single turn," Mr Adams said.

"And we have Labour ministers out briefing on more austerity policies, more cuts, more pressure on working people, on public servants and the unemployed." Mr Adams said the IMF-EU deal was unsustainable.

Ajai Chopra, head of the IMF's mission to Ireland, met Finance Minister Michael Noonan and Brendan Howlin, Minister for Public Sector Reform in Dublin for more than an hour.

The IMF has said the forecasted slowdown in economic growth would also put a big dent in the Government's efforts to bring the budget deficit into line with European rules - 3%. It said Ireland would not hit targets for this year - running at 10.8% rather than the desired 9.4% - and this would knock back attempts to balance the books by 2015.

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