Ireland will not seek a European Commission extension to the 2014 deadline, by which the State has to reduce its deficit.

A spokesman for the Department of Finance said on Thursday that it was not realistic to extend out the period of adjustment, which could potentially reduce the savagery of the proposed cuts.

The spokesman said an extension would result in more of the State's revenue being used to simply pay interest on the current level of debt. "We cannot allow this to happen", he said.

"We (and other countries) have also agreed a 2014 timeline with the EU Commission, and the government remains committed to this."

However, there is some growing concern that the 2014 deadline is too ambitious.

This morning, the Economic and Social Research Institute (ERSI) said it was concerned that the attempt to reduce the budget deficit to 3% by 2014 could tip the economy into a deflationary spiral of low growth and high unemployment.

The institute said that according to its calculations, savings of up to €€15 billion could be needed - twice the sum that was under discussion at the time Ireland and the Commission agreed to the 2014 deadline.

However, while the ERSI maintained that the 2014 date was "worryingly ambitious", its spokesman said they were mindful that the extension was "highly unlikely" and so the Government must operate within the constraints as presented.

"Although we have based our forecasts on a budgetary package of €4 billion of savings, it could well be that a higher amount will be sought. Whatever it is, the scale of the task is such that there will be a need for adjustments in current and capital spending and in taxation."

The institute also believed the Croke Park Agreement may have to be re-examined, given the scale of required savings.

(DW/BMcC)