Ireland to Cut Spending 20%, Raise Taxes as Talks Climax

From Bloomberg.com:

Ireland’s government said it will cut spending by about 20 percent and raise taxes over the next four years as talks on a bailout of the country near conclusion.

Welfare cuts of 2.8 billion euros ($3.8 billion) and income tax increases of 1.9 billion euros are among the steps planned to narrow the budget deficit to 3 percent of gross domestic product by the end of 2014. The shortfall will be 12 percent of GDP this year, or 32 percent including a banking rescue.

Prime Minister Brian Cowen is racing to conclude talks with the European Union and the International Monetary Fund on an 85 billion-euro aid package as his governing coalition crumbles. EU Economic and Monetary Affairs Commissioner Olli Rehn said yesterday Ireland needs to pass next year’s budget “sooner rather than later” as concerns mount the fiscal crisis may spread to other euro nations such as Portugal....read on