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Ireland plans deep budget cuts to fend off bank crisis

A man leaves the Bank of Ireland in Dublin. Ireland admitted Monday it is in contact with 'international colleagues' over its debt crisis but denied seeking a bailout.

Steve Chiotakis: Overseas in Ireland, that country's bare-bones budget plan is public. And the Irish government hopes to accept as much as much as $115 billion in bailout money from its European neighbors.

But the plan, which cuts spending and adds taxes, hasn't gotten much traction in the global financial markets. And the euro continues to slide against the dollar.

More from London, and Marketplace's Stephen Beard.

Stephen Beard: Ireland's further deep cuts in public spending were supposed to reassure investors, and to secure a multi-billion dollar bailout package from the EU and IMF.

But the Dublin government is in complete disarray and there are doubts whether it will be able to deliver any more austerity. And that, says Steve Barrow of Standard Bank, has further undermined confidence in the euro today.

STEVE BARROW: I think the markets are still very skeptical about Ireland itself and about the possibility that others like Portugal or Spain, for instance, could be dragged into the mire.

A senior member of the European central bank has offered further reassurance. He said the bailout fund could be increased. And another top official insisted the euro will not break up.

But analysts are quick to point out that only four months ago EU officials gave the bank of Ireland clean bill of health. Today, it's bust and about to be nationalized.

In London, this is Stephen Beard with Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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