Ireland outlining drastic cuts plan

Ireland outlining drastic cuts plan

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Brian Cowen has defied calls to quit over the economic crisis (AP)

The Irish government is to publish a 15 billion euro (£12.7 billion) plan for drastic savings as it battles economic ruin.

Significant tax hikes, new levies in property and water and cuts to the dole and minimum wage are expected in the 150-page four-year budget road map.

Prime minister Brian Cowen has called for solidarity across the political system in Dublin, while social justice campaigners demanded the poorest were spared.

Opposition parties were warned Ireland’s bail-out was only secure if swingeing cuts and tax rises and a more detailed six billion-euro (£5.1 billion) budget on December 7, were passed.

The final loans figure has not been confirmed with formal negotiations with the International Monetary Fund (IMF) and Europe only a few days old. Estimated figures range from 85-95 billion euro (£72-80 billion) but banking and economic experts across Ireland and Europe have raised concerns in the past 24 hours that might not solve the problem.

They are also worries in some circles of a sustained bank-run by fearful customers. Irish banks have seen 23 billion euro (£19 billion) in deposits leave the country this year.

Guaranteeing Ireland’s solvency is also seen by EU governments, and officials in Dublin, London, Brussels and Frankfurt, as essential to protecting the euro as a currency. “Contagion” has been the fear across Europe with worries the Irish financial and economic chaos will spill over to troubled nations like Portugal, Spain and Italy.

Mr Cowen has denied he is clinging to power as the Opposition demanded he bring forward next month’s Budget. He also dismissed calls to revise a timetable to strike a deal on the bail-out. “My sole motivation is to ensure that a four-year plan is published… and that a budget is passed by this House,” Mr Cowen told the Dail parliament.

He also spent several hours with his Fianna Fail parliamentary party on Tuesday night where a number of TDs questioned his leadership. He told colleagues he felt he had a job to do and was focused on what needed to be done.

The government’s chief whip John Curran denied rumours of a heave and claimed the overwhelming number of people who spoke on the leadership issue were “absolutely supportive” of Mr Cowen. Mr Curran said he believed the government had the numbers to get the December 7 Budget through the Dail.

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