THE IRISH economy faces a fresh round of austerity measures as the government announced another swathe of tax hikes and spending cuts in its budget yesterday.
The government, led by Taoiseach Enda Kenny, will make €3.5bn (£2.8bn) more savings, to add to €25bn already slashed since 2008, as part of one of the most disciplined austerity programmes in Europe.
But Ireland, which is growing, has seemed able to weather the austerity, even combined with the Eurozone debt crisis, and its services purchasing managers’ index yesterday maintained its five-year high of 56.1, indicating solid growth in the biggest sector of its economy.
The gist of the budget is already agreed, as part of the conditions in the €85bn bailout it received from the EU and the IMF.
Kenny should have little problem passing the measures, which include €1bn of tax hikes, €500m of cuts to capital spending, and requires the government to trim €1.7bn from departmental spending, as his government enjoys a record majority in the Dail.