Ireland draws up spending budget cuts in excess of $20 billion

It seems that the entire world is tightening its budgetary belt, but some nations are in worse shape than others. Consider Ireland, where Prime Minister Brian Cowen and Finance Minister Brain Lenihan are trying to pick up the pieces after their nation’s banks literally guaranteed each single deposit no matter the size and loaned with reckless abandon. They had to layout austerity measures aimed at keeping their entire country from careening into bankruptcy. To further solve the Ireland debt crisis, Cowen and Lenihan came up with an array of Ireland budget modifications amounting to a massive $20 billion cut within the next 4 years, reports the BBC.

Ireland budget cuts, massive bailout deemed necessary

The $20 billion budget cut in Ireland will consist of reducing the minimum wage within the country, increasing and adding taxes, government spending cuts, and thousands of jobs being cut across the country. $113 billion is expected to come in addition to the Cowen and Lenihan budget cut from the European Union and the International Monetary Fund.

Public sector hit hard with an expected 25,000 job cut

Cowen and Lenihan's plan to get Ireland out of debt consist not only of cutting 24,750 public sector jobs, but also of the $3.7 billion welfare cut and increases taxes to make an additional $2.5 billion. The current minimum wage of $10.25 per hour could possibly be reduced by $1.34. A boost from 21 to 22 % in 2012 and then to 24 percent in 2014 might be added to the value added or consumption tax. A site value tax, better known as a property tax would increase homeowners payments by $267 a year by 2014.

Ireland's austerity plan will not contain a boost in the 12.5 percent corporation tax so that it doesn't drive away any business.

Difficulties and solutions

To "make sure (the people) have hope for the future," is what Taoiseach Cowen says about Irelands financial plans, despite the fact that you will find already many people ready to fight these new budget cuts. Calls for a general election to shake up the federal government have resounded, but Cowen has refused to remark on this before parliament votes on his austerity plan Dec. 7.

“Then the people can decide who they want to govern the country,” said Cowen.

Citations

BBC

bbc.co.uk/news/business-11829811

Back when 6 billion euros sounded good

youtube.com/watch?v=T_HVUBfW-Y