Fiach Kelly

Political Correspondent

A “giveaway budget” before the next general election could backfire because the electorate will be cynical of a such a move, Minister for Transport Leo Varadkar has warned.

Mr Varadkar said the Government would like to give something back after years of austerity but says the Coalition should be very cautious.

He also said a contingency plan for a collapse in the euro was in place, but said this will not be needed now.

“I would be very keen to give something back to Irish people,” Mr Varadkar told Newstalk radio.

“Irish people have endured huge sacrifices, have seen their standards of living go down and everyone in Government would like to give something back.”

The Government is expected to announce this week that one more tough budget is needed before austerity ends just before the general election, due to take place in 2016.

“I would be cautious about a giveaway budget before the election because people are rightly cynical about that kind of thing,” Mr Varadkar added. “I think it will backfire. I would be very cautious about that.

“If things fall right way for us, it might be over before that. We have seen E2 billion in adjustments pencilled in for the next budget, that is what we working towards.

“But if we do better in terms of growth or if unemployment falls faster than we project and it might because it has to date, it is quite possible that next year’s budget might just be a neutral budget rather than an austerity budget or a giveaway budget.”

The Dublin West TD also said he once doubted Ireland would get to a position to exit the bailout, and thought a second bailout might be needed.

“I doubted myself whether we would need a second bailout or not. A lot of people at the time talked about the country defaulting, talked about the euro collapsing but none of that has happened. We have managed to pull through and become the first European country to exit the bailout.”

Mr Varadkar’s comments come ahead of Taoiseach Enda Kenny’s televised address tonight to mark the bailout exit.

Mr Kenny is expected praise the Irish people for the sacrifices they have made, while cautioning against expectations that a recovery is already secure.

However, Mr Varadkar said: “We have pulled through the worst of it.”

“There were periods particularly in the first year in office where sometimes you couldn’t sleep at night thinking of how we would make the savings and what the consequences might be for real people and constituents and the kinds of things we might have to do. Particularly when the euro did look shaky, we got very worried for a period.”

The Coalition had a plan in place in case the euro collapsed, he added, but said it was unlikely to be ever used.

“I don’t want to go into any details. Anybody would expect their government to prepare for any contingency, even contingences that would have been very unlikely that would have been very unlikely.

“It was never contemplated Ireland would leave the euro but contingency had to be in place in the event that the euro were to disintegrate. Contingencies were prepared but that is now in the past. The euro is very secure, our financial stability is secured, our public finances are improving. “