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Journalism of Courage
The Irish government has detailed the toughest budget on record targeting euro 6 billion in spending cuts and tax hikes,and warning passage was crucial to avert a deeper crisis and free up EU and IMF rescue funds.
In a speech to Parliament,Irish finance minister Brian Lenihan sketched out austerity measures for 2011 including cuts to child benefit and public sector pensions,but stuck with growth forecasts that some economists and even the European Commission believe are too optimistic.
Irelands Parliament passed the first in a series of votes on the budget on Tuesday evening,suggesting that enough of the budget is likely to pass to release bailout funds. The budgets success had looked in doubt when independent politicians,on whom the government depends for support,said they might vote against it. But the steps to pass the budget seemed to satisfy the IMF,which scheduled a board meeting for Friday to consider a euro 22.5 billion loan for Ireland,part of a bigger euro 85 billion joint EU/IMF rescue package.
IMF managing director Dominique Strauss-Kahn is set to return to Washington from Europe to chair the meeting.
We welcome approval of the 2011 budget by the Irish parliament, an IMF spokesman said. This is a clear sign of Irelands strong commitment to tackle its problems and harness the impressive growth potential of this open and dynamic economy.
The risk premiums investors demand to hold Irish 10-year bonds instead of German benchmarks fell on Tuesday to their lowest levels in a month,in anticipation that the budget would be approved.
