Ireland, which expects to have one of Europe's biggest deficits this year at around 12.5 percent of GDP, has so far aimed to cut that to 3 percent by 2013, though unions are lobbying for a more gradual adjustment until 2017.

"We consider that the effective action asked by the council six months ago has been implemented or is being implemented," Economic and Monetary Affairs Commissioner Joaquin Almunia said. "And if we consider that the economic environment has more difficulties than expected, in this case according to the revised pact we can extend the deadline for one year."

Irish Finance Minister Brian Lenihan has said he must find savings -- mostly by cutting spending -- worth 4 billion euros ($5.95 billion) in the December 9 budget for 2010 just to stabilise the budget deficit at around 12 percent of GDP.

Earlier on Tuesday, the Irish Times newspaper said Almunia would extend the 2013 deadline on Wednesday due to weakening tax receipts and higher social welfare spending, but insist that 4 billion euros must still be saved this year.

"If there was an extension, it would lessen the extent of the adjustment required for future years but it would not impact on the adjustment required for 2010," a Finance Ministry spokesman said, without confirming whether an extension was expected.

LONGER ADJUSTMENT

The Irish Congress of Trade Unions, which took tens of thousands of workers to the streets last Friday against the government's plans to cut spending, said that the possibility of extending the EU deadline showed its demand for a longer fiscal reform period had been justified.

"(It) is both a vindication of the Congress demand for a longer adjustment period and proof that government policy is driving the economy into the doldrums," ICTU said.

The Commission forecast last week that Ireland's deficit would hit 12.5 percent of GDP this year and widen to 14.7 percent in 2010 and stay there in 2011.

Lenihan has said there was little scope to raise tax rates after two emergency budgets focussed on taxation in the last year, but Dan Boyle, chairman of the smaller government member Green Party, told a parliamentary debate:

"I'm confident that there will be additional taxation measures, there has to be additional taxation measures."

Boyle, however, did not clarify which measures he expected.