With its once booming economy in tatters, the Irish government has come up with yet another emergency budget.
It is the second time in six months that Dublin is trying to convince investors as well as its European partners that it has a credible plan to tackle the worst public finances in Europe. In the parliament, Finance Minister Brian Lenihan announced spending cuts and tax increases and said he expects the Irish economy to contract by eight percent this year, but he insisted the fundamental factors that led to phenomenal growth in recent years are still there and things can be fixed. Earlier in a webcast Prime Minister Brian Cowen explained the problems: “We’ve seen a third of our revenue base disappear in recent months, an indication of the seriousness of the problem, the fact that we’ve a worldwide recession and we must come through this recession as best we possibly can being a small open economy.” The finance minister confirmed that Dublin has agreed a five year time frame with the European Commission to fix Ireland’s economic problems. The budget deficit is predicted to hit 12.75 percent of GDP this year.