This is from page 30 of the European Commission’s Winter 2011 Review of the Economic Adjustment Programme for Ireland which was released last Friday.
Although the fiscal forecasts incorporate some small buffers, a further deterioration of the macroeconomic backdrop could require additional fiscal tightening later in the year, which could have pro-cyclical contractionary effects.
The same day the IMF released their Fifth Review of Extended Arrangement with Ireland which beginning on the bottom of page 23 says:
… the 2012 targets remain within reach despite the weakening in growth prospects. In the event of significant further reduction in growth projections, automatic stabilizers on the revenue-side should be allowed to operate to avoid jeopardizing the fragile economic recovery as envisaged under the program.
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