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EU adopts 85bn euro Irish bailout
 [Iran Press TV] European Union finance ministers have formally adopted the Republic of Ireland's bailout plan hours before the Irish MPs' vote on an austerity budget for 2011.Dublin is expected to announce the details of its toughest austerity measures in return for a bailout from the EU and the International Monetary Fund (IMF). The country will cut EUR 15 billion (USD 20 billion) in spending over the next four years as part of the bailout deal to recover its economy. The EU-IMF deal is worth EUR 85 billion in mostly external loans and guarantees, which includes EUR 17.5 billion taken mostly from Ireland's public pension fund. In exchange for the bailout, Ireland now must overhaul its banking system and reduce its deficit to below 3 percent by 2015. The country's National Recovery Plan unveiled two weeks ago will see child benefit, social welfare and state pensions slashed. The budget cuts for the first year, with cuts in welfare spending and jobs worth EUR 6 billion, will be the toughest. The cuts will also see an increase in taxes and will affect health, social welfare and education sectors, angering many citizens. Thousands of protesters are expected to gather outside parliament upon the announcement of the new budget plan. Prime Minister Brian Cowen's government insists that the bailout is needed to help the country's faltering banking system, a bursting property bubble and a prolonged recession. But economists have warned that the spending cuts risk a downturn in the economy which would make Ireland's debt targets even harder to achieve. "With such a figure [EUR 6 billion] being taken out of the economy, it is hard to see domestic demand picking up anytime soon," said Alan McQuaid, chief economist at Bloxham. Posted by: Fred 2010-12-08 |
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