EU hails Irish budget cuts

(BRUSSELS) - The European Commission hailed Thursday Irish budget cuts which it said were "appropriate" as borrowing rates for the republic shooting to historic highs.

"This provides an important anchor for financial markets and also underlines the Irish authorities' commitment to putting public debt on a sustainable downward path in the near future," EU economic and monetary affairs commissioner Olli Rehn said.

"Difficult but necessary policy choices are still to be made as regards the measures needed to reach this objective."

However, "a 2011 budget involving a consolidation effort of six billion euros... would be appropriate, as it would strike a balance between allowing the recovery to strengthen and addressing budgetary challenges in a timely and frontloaded fashion."

Rehn visits Ireland early next week, when he wants to find out more about parallel structural reforms.

Ireland announced a four-year austerity drive aimed at saving the debt-ridden eurozone nation 15 billion euros, slashing the government deficit to between about 9.25 and 9.5 percent of gross domestic product (GDP) next year, from 32 percent currently caused by the cost of massive bank bailouts.

The yield -- the return paid to investors -- on Ireland's 10-year bond was at 7.516 percent on Thursday, up sharply from 7.299 percent.