The Irish government says it is on the road to recovery, but still hit the country’s long-suffering people with a new 3.5 billion euro dose of austerity on Wednesday.
Finance Minister Michael Noonan presented a budget that included a politically incendiary property tax, even as one in six Irish homeowners are struggling to pay their mortgages.
Dublin has started to be able to sell government bonds again and is one of few eurozone countries to keep eking out mild growth, but with one of the highest budget deficits in Europe, it now faces further harsh spending cuts and tax hikes as part of its EU/IMF bailout.
However, Noonan nevertheless said the end was in sight. He told parliament: “When I stood before the house last year, the Irish government was locked out of bond markets. Our 2-year bond yields were almost 10 percent.”
“Now they are less than 2 percent. We have seen a total transformation in only 12 months … We are now well on the road to recovery so let’s look to the future with confidence.”
There was some good financial news on budget day, Ireland’s services sector, which accounts for about 60 percent of the economy, grew at its fastest pace in five years.
At the same time figures were released that showed the jobless rate was down to a 17-month low, though still close to a crisis high of 14.6 percent.