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Ireland Faces Toughest Budget in Its History

08 December 2010 03:15 (UTC +04:00)

Baku-APA. Debt-struck Ireland braced for the painful details Tuesday of the toughest budget in its history, a condition for receiving a massive international bailout, APA reports quoting abcnews.go.com website.

Finance Minister Brian Lenihan’s 2011 fiscal plan aims to lower the deficit from this year’s estimated 32 percent of gross domestic product, a postwar European record. It was being unveiled and voted on Tuesday in parliament as protesters gathered in exceptionally icy weather outside.

The day’s first protester arrived at dawn and left under police custody. The unidentified man drove up in a cherry picker covered in anti-government placards, parked it near the parliament gates, then began blasting pop music from loudspeakers and throwing tennis balls from the elevated platform. Police tore down the protest signs and seized the vehicle.

Lenihan says the plan â€” the fourth emergency budget for Ireland since 2008 â€” will cut spending by a further euro4.5 billion ($6 billion), about 9 percent, and raise taxes by euro1.5 billion, 5 percent.

The imminent, unprecedented belt-tightening spread an air of gloom across Dublin, where households faced overnight cuts to ice-hit water supplies and shoppers voiced worries that their bank accounts were already running dry.

"The banks have brought this country to its knees. We’ll be paying for their mistakes for the rest of our lives," said Alice Dunleavy, 30, a civil servant joining a line of nervous cash-seekers outside a Bank of Ireland branch. The queue snaked along the icy sidewalk as customers found automated teller machines nationwide refusing to dispense currency â€” a daylong software breakdown, the bank insisted, that sent fears and pulses racing.

Ireland this year is spending more than euro50 billion on regular government activities and collecting just euro31 billion in taxes for an underlying deficit of 12 percent, four times the limit for members of the euro currency. Exceptional bank-bailout costs on top of that have driven this year’s deficit to 32 percent of gross domestic product, a postwar European record