PRESS CONFERENCE:THE TARGET of a minimum €3 billion in savings for the forthcoming budget this December will now have to be increased, Minister for Finance Brian Lenihan told a news conference at Government Buildings .
However, the Minister declined to give a figure beyond stating that "a significant adjustment" would be required because the context had now changed.
The €3 billion adjustment "pencilled-in" for the next budget was "an absolute minimum", he said.
"As [ European] Commissioner Rehn pointed out, the Government has to establish a pathway of fiscal credibility but the Government also has to have regard to the paramount need to safeguard the economy and safeguard jobs and growth."
Mr Lenihan said the Government would not be "rushing into giving this figure or that percentage".
"A plan will be announced by the Government in early November which will set out the precise estimates of expenditure, and proposals in relation to revenue receipts and also any additional revenue that may be required to meet the target of eliminating our borrowing to below 3 per cent by 2014," Mr Lenihan said.
The Minister stressed that the fiscal environment had changed.
"The adjustment that's required next year will now have to be put in a very different context because the Government has decided to draw up a four-year budgetary plan for the rest of the stability and growth pact period."
Asked what he would say to citizens who were angry because they were being saddled with the debt incurred by the banks, Mr Lenihan said: "The Irish people are entitled to be angry with the bankers who lent recklessly over a considerable period of time in the earlier part of this decade.
"It's clear that these losses were installed in our banking system and in some of the banks by the middle of the decade and it is clear that some of the banks have spent a considerable period of time trying to conceal the existence of these losses.
"With the establishment of Nama [ National Asset Management Agency], the State went in, established exactly what the losses were, and we're now dealing with them," he said.
He would have liked a speedier decision on the bailouts since the guarantee in September 2008 but the Government didn't have this option "given the limited monetary artillery at our disposal".
The two-year guarantee bought the Government time, he said.
Nama, which is buying €73.4 billion of the most toxic loans from the banks, needed time to assess the true scale of the bad debts at the financial institutions.
"Could we have gone any faster? I don't think we could have if we wished to produce a credible solution to our problems," he said.
Nama had independently verified the state of the banks and brought the process to a practical conclusion setting the estimated costs, said Mr Lenihan.
"We haven't taken the toxic assets of our banking system and hidden them in a box and said the assets are worth 80 per cent of what they said they were worth," he said.
"We have actually gone in there, opened the latch, looked at the loan books and made an independent valuation of them, and given the natural tendency of bankers to deny problems, that was the right way to go about it and that process necessarily is protracted."