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'The costs of borrowing are real': Finance Minister says €30 billion deficit will have to be balanced

Paschal Donohoe said the country will need to find a way to run a budgetary surplus once more.

Finance Minister Paschal Donohoe speaking during a press conference at Government Buildings.
Finance Minister Paschal Donohoe speaking during a press conference at Government Buildings.
Image: PA Images

MINISTER FOR FINANCE Paschal Donohoe has said that the huge budgetary deficit the country is incurring as a result of the Covid-19 crisis will have to be addressed in the future.

Donohoe said that two weeks ago he put the expected deficit figure for the year at €23.5 billion but that he also expected that to grow as the crisis developed. Several projections have now put the figure at closer to €30 billion.

“Two weeks ago, I said that on the basis of decisions that were made, the figure would be and was €23.5 billion,” the minister told Newstalk Breakfast

But in the same statement that I made. I said that in the basis of decisions that I expect we would be making in the coming weeks and on the basis of bills that are now coming in because of public health decisions that have to be made. I did indicate with you a few weeks ago that I did expect that it will grow considerably behind beyond that, and that is happening at the moment. 

Donohoe added that the issue of borrowing has become “a really big debate” this week but said that there is no argument about whether borrowings need to be repaid.

The costs of borrowing are real and one of the issues that both the Taoiseach and I have looked to address over the last number of days, is just to make the case, is that in the run in to this crisis we reduced our borrowing, we got to a point that we were actually in a budget surplus.

“That in turn has enabled us to do what we can do now. And over time, as we are successful I believe in containing this terrible disease. We will have to do that again,” Donohoe added. 

The Finance Minister said last week that the Pandemic Unemployment Payment (PUP) will continue beyond its original end date but that the level of the payment may change.

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Speaking in a separate interview on RTÉ’s Morning Ireland, Donohoe said that the details of this have not yet been decided.

“The government hasn’t made the decision in relation to that yet, but of course we know we will need to do that soon. When we make that decision, we will communicate quickly that decision to all who are depending on it,” he said.

“I would very briefly say that the level of intervention that we now have, where we have well over a million of our citizens having their income sustained by the state is enabled by the great care we’ve taken in our public finances in recent years,” he added.

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Rónán Duffy

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