The Irish Government has today announced plans to reduce the countries growing deficit. The four year plan is designed to save the state £13 billion, in an attempt to rescue the faltering Irish economy.
The government is also continuing discussions with the EU and the International Monetary Fund (IMF) about a bail-out package that could total £60billion.
The cuts, which will hit Irish households, include a reduction in the minimum wage by a euro an hour, and an increase in VAT from 21% to 22% in 2013, and a further increase to 24% in 2014.
A new property tax will also be introduced, costing Irish households a further £257 a year and the public sector payroll will be cut by £847 million, leading to 27,000 civil service job cuts. This also breaches a previous agreement with Irish trade unions.
Low corporate tax rates, which have attracted some of the world’s biggest companies, will be kept low, as many see this as the Irish’s biggest chance of a quick recovery. The rate, which is just 12.5%, is very low compared to a 34% rate in France, and a 30% rate in Germany.