The government has affirmed its commitment to €2 billion of tax hikes and spending cuts in the next Budget.

It has published an update on the Irish economy to be sent to the European Union, which confirms €1.3 billion in spending cuts and €700 million in tax hikes.

The document comes only days after the ESRI suggested the government could meet its EU targets without announcing any new taxes at all.

However the door is left open for the government to change its mind, saying the final decision will be made closer to Budget Day.

The opposition says the new document marks a u-turn from the government - which had previously discussed the prospect of cutting taxes on middle-income families.

Earlier, The Tánaiste Eamon Gilmore said it was too early to speculate on cuts and tax hikes in the next budget.

But he added that the economy is looking up.