Ireland to cut six billion euros

Ireland is cutting six billion euros from its 2011 budget as part of a plan to save 15 billion euros over four years, the government announced Thursday. Finance Minister Brian Lenihan said the initial savings would cut the public deficit to between 9.25 and 9.5 per cent of GDP, down from the current 32 per cent.

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The government is due to present its 2011 budget on 7 December and plans to unveil further details of its austerity package later this month. It is expected to make up the shortfall in savings more than in raising taxes.

 
The deficit is putting pressure on Prime Minister Brian Cowen, who this week again
rejected calls for an early general election.
 

The coalition government said Thursday it expects savings of three to four billion euros in 2012, three to 3.5 billion in 2013, and two to 2.5 billion in 2014 as it tries to cut the deficit to 3 per cent of GDP by 2013.

EU Economic and Monetary Affairs Commissioner Olli Rehn said the cuts were appropriate, adding that "difficult but necessary policy choices" lay ahead.

Rehn is visiting Ireland early next week. The International Monetary Fund meanwhile warned governments against tightening budgets to rein in public deficits given the
prevailing risk in a weak economic recovery from global recession.