More austerity in Ireland

IRISH Prime Minister Enda Kenny set out a raft of tough new austerity measures in his Budget address yesterday, pledging to cut spending and raise taxes to bring down the nation’s huge debt.

Setting out the “challenge” of restoring Ireland’s economy, Kenny said the government was still spending €16bn (£13.7bn) per year more than it raised and would need to cut €2.2bn from spending, and raise €1.6bn in extra taxes, to rein in the deficit to three per cent of GDP by 2015.

“This problem will not be fixed unless we take action to bridge this gap,” he said. “This budget will be tough – it has to be.”

Belt-tightening measures include a two percentage point increase in VAT, to 23 per cent, and further cuts to the education and welfare budgets.