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European financial crisis: Ireland and Greece


European financial crisis: Ireland and Greece

Ireland is still no closer to a decision about accepting a bail-out, despite continued pressure from other countries in the euro-zone.

On Thursday, central bank governor, Patrick Honohan, confirmed that a package worth tens of billions of euros was being put together. However, the Irish government insist on waiting for more talks involving the European Commission, European Central Bank and the IMF.

Irish Prime Minister, Brian Cowen, is perhaps hoping to dampen calls for his resignation with the details of a four year plan to save 15 billion euros due to be published next week.

Some sympathy does appear to be coming from financially beleaguered Greece, which has already had to take the bail-out money and implement harsh austerity measures. Speaking in Frankfurt, Greek Finance Minister, George Papaconstantinou, said: “The Irish Government is doing the best it can in difficult circumstances, and I’m sure they will make the right decisions when they think its the right time.”

On Thursday, the Greek government was forced to present a revised budget for 2011 to parliament. Hoping to cut the estimated 9.4 per cent GDP down to 7.4next year, there will be severe spending cuts, job losses and tax increases. Most of the cuts will be in health, defence and welfare. Pensions will be frozen, and the lowest of the two VAT rates will rise from 11 per cent to 13.