Ireland to outline its four-year austerity package

| November 24, 2010 | 0 Comments

Ireland will become the latest euro zone nation to unveil unpopular austerity measures, in a move designed to bring down the country’s budget deficit.

Many other nations have introduced similar measures but they are likely to cause protests and trade unions have already warned of “civil unrest”.

Ireland is aiming to save €15 billion (£13 billion) between 2011 and the end of 2014 - 11% of the economy‘s annual output.

The austerity plan for the former “Celtic Tiger” economy will be unveiled today - as a condition of its emergency bailout.

The Government is set to outline details of spending cuts and tax hikes. One move which is set to prove deeply unpopular is plans to cut the minimum wage by one euro to €7.65 (£6.55).

Ireland’s minimum wage is one of the highest in the euro zone and many have called for it to be reviewed.

In the meantime, there are contagion fears as borrowing costs in Portugal and Spain have surged to dangerous levels.

Yields on 10-year Portuguese bonds rose to 6.9% – mimicking what happened in Greece and Ireland – just before they were forced to seek emergency aid. Meanwhile, 10-year Spanish bonds surged to 4.87%.

Yesterday, German Chancellor, Angela Merkel, admitted that the eurozone was “facing an exceptionally serious situation”.

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