A SENIOR OFFICER of the European Central Bank has warned that Ireland will need to increase efforts to tackle the budget deficit if it is to avoid a Greek-style financial meltdown.

Lorenzo Bini Smaghi, a member of the executive board, told reporters in Milan that Ireland “knows what it needs to do, starting with an ambitious fiscal restructuring plan, with concrete measures, in order to reach the targets it has set.

“They know what they have to do, they have to do it quickly,” he said.

International support for the government’s early action to tackle the budget deficit, Reuters said, has dwindled as the sheer scale of the growing public bill for bailout the country’s retail banks has become more evident.

The final amount of the bill to bail out Anglo Irish Bank is expected to be announced tomorrow, with the government insisting that the amount can be managed – despite it being set to exceed the national debt to over 100% of GDP – because it would be spread out over the decade or more required for the recovery arm of the restructured Anglo to be wound up in full.