The European Union needs to seriously consider giving Ireland an extra year, until 2016, to bring its budget deficit down to the EU limit of 3 percent of gross domestic product, Ireland Labour Party said on Sunday, according to Reuters. As part of an 85 billion euros ($116 billion) EU/IMF bailout, Ireland has pledged to radically reduce its shortfall, estimated at nearly 12 percent GDP last year, or 32 percent when a one-off hit from aid given to the country's banks is included. Labour, likely to form a new coalition government with main opposition Fine Gael after an election due to be held within the next month, said the current deadline risked further delaying a return to sustainable economic growth. "It is an option that needs to be seriously considered in order to grow the economy," Joan Burton, the party's finance spokesman told reporters. "We are looking at that possibility because the key to getting the economy back is this important mix between dealing with the deficit but at the same time getting some growth back in that you have some return of consumer confidence." One of the most trade-dependent economies in the world, Ireland is relying on export-led growth to help it replenish state coffers laid bare by a property crash. This year the government is targeting a budget deficit of 9.4 percent of GDP and has pledged to bring it below 3 percent by 2014, a target Fine Gael, Labour's likely future coalition partner, has signed up to. The European Commission has already given Ireland an extra year, until 2015, to get the euro zone's worst deficit under control but estimates the Irish economy will grow at just 0.9 percent next year, just over half the government forecast. Burton also said Labour, which like Fine Gael will seek to renegotiate parts of the IMF/EU package if it is in the next government, would also like the see the maturities on Ireland's bailout loans extended. Two euro zone sources said on Friday EU officials were considering extending euro zone bailout loans to Ireland to 30 years from seven. The sources said European Central Bank governing council member Axel Weber, head of Germany's Bundesbank, had suggested stretching out the maturities from three years for Greece and seven for Ireland as part of a package to overcome the crisis. "We would like to see an extension of the period of time because quite frankly we are going to need a longer period of time (to repay the loans)," Burton said.
