THE MINISTER FOR FINANCE has told the BBC that the Irish economy is on the road to recovery – but that it still faces “severe difficulties” in the budgetary and banking areas.

Speaking at the National Convention Centre this morning, Brian Lenihan said the state was well funded until the middle of next year but that there were significant problems still facing the country.

“Ireland as a country is in a trade surplus with the rest of the world, but it has severe difficulties on the budgetary front and the banking front,” Lenihan said in a doorstep interview.

“We plan to address those difficulties and we are addressing them. And we will succeed in doing so. We’re well funded as a state until the middle of next year – but in the meantime we have to put our budgetary house in further order with a strict budget.

Common ground with the UK

Lenihan also revealed that his department had been liaising with the Treasury in London, sharing thoughts on how to tackle the various economic problems common to both jurisdictions.

“We’re learning lessons from each other. We’ve been cutting back public expenditure since the latter part of 2008… our deficits have been very similar in size; we introduced a pension levy on public servants in 2009 and I nsee now the UK is mooting a similar proposal,” Lenihan said.

Asked whether he felt that the Irish people – who the BBC interviewer commented were usually very upbeat – had become demoralised after the consistent cuts, Lenihan said:

They really need to recover – and we really need to recover – faith in ourselves as a people. We can do it, we’ve surmounted huge economic challenges here in the Republic in the past, and defeated them. And we can do the same this time.

It’s not a matter of going back to the bad old days of the 90′s and the 80s, but we do have to go back a few years because our tax receipts went back here, in this state, to 2003 levels.

[But] alongside all the budgetary and banking difficulties, you still have a very robust export-driven economy here. Our exports have increased throughout this world economic crissi and we’re working on them, sector by sector… they’ve remained vibrant throughout this crisis.

Our corporation tax recepits have held up very well. So there’s a lot of positives in this economy… and we’re going to keep working on those to sort our problems out.