Irish parliament approves austerity budget

| December 8, 2010 | 0 Comments

The Irish Government has outlined its austerity budget, aimed at saving €6 billion in spending cuts and tax hikes, designed the trim the country‘s budget deficit.

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

The measures are a condition of its €85 billion bailout loan as it battles with a severe debt crisis.

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

Since the credit crunch three years ago, Ireland’s public finances have been battered by having to prop up the banking sector, a collapse in its property market and one of the worst recessions in the euro zone.

Ireland, once known as the “Celtic Tiger” economy, experienced a property boom in the late 1990s, with multinationals arriving to take advantage of one of the lowest corporate tax rates in the euro zone.

However, the country’s banking system came close to meltdown after the slump in the country’s property market resulted in a fall in the value of investments linked to it.

Four of the country’s banks have now been nationalised, while property prices have fallen by more than 50%, in some cases.

It suffered one of the deepest recessions of its fellow euro zone nations.

Meanwhile, Ireland’s bailout follows that of Greece, which was the recipient of €110 billion bailout in May.

There have been fears that the debt crisis could spread to other weaker euro zone economies, such as Portugal, Italy, Spain and Belgium.

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