Country awaits 'most feared budget'

Country awaits 'most feared budget'


Brian Cowen's coalition will try to impose the cuts with only a two-seat majority

Ireland is bracing itself as the Government prepares to unveil the most feared budget in living memory.

The massive six billion euro (£5 billion) cost-cutting package is expected to slash social welfare, including jobseekers and child benefit, in a bid to cut public spending.

Speculation has mounted that public sector wages will be capped and ministers’ salaries cut as the government takes on a four-year battle to restore the state’s crippled finances.

Public spending will be reduced by 4.5 billion euro (£3.8 billion) while taxes will raise an extra 1.5 billion euro (£1.3 billion).

Irish prime minister Brian Cowen’s shaky coalition will try to impose the cuts with only a two-seat majority. But the embattled government received a boost after an independent member of the parliament, whose support is crucial, said he would back the cuts.

Michael Lowry, Tipperary North TD, said he would put the country first despite a potential backlash from his constituents.

The veteran politician said that after talks with the government he was satisfied that the old-age pension would be protected, along with free travel and electricity for the elderly.

Mr Lowry said his fellow backbench independent, Kerry’s Jackie Healy-Rae, was also expected to back the budget, due to be unveiled in the Dail by finance minister Brian Lenihan mid-afternoon.

The potentially savage package comes just over a week after the government revealed it was taking an 85 billion euro (£72 billion) bailout from the International Monetary Fund/Europe.

Mr Cowen’s crippled coalition government has suffered widespread criticism for the move by a public angry at the perceived surrender of the state’s hard-won economic sovereignty.

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