Dublin unveils budget on crisis

TEXT OF STORY

Steve Chiotakis: Bank shares are down in Ireland today on growing fears about the state of the Irish economy. Earlier this week, Dublin unveiled a second emergency budget to deal with the deepening crisis there. From our European Desk, Stephen Beard reports.


Stephen Beard: Once hailed as the Celtic Tiger, Ireland today looks more like a mangy cat. The economy is shriveling. GDP could fall by more than 10 percent. Unemployment has soared well into double digits.

The government's finances have collapsed. Revenues from the once booming real estate market have dried up. The budget deficit is widening dangerously.

Graham Mather is with the European Policy Forum. He says the Dublin government took an extraordinary measure in its budget this week. It raised taxes; it had little choice.

Graham Mather: No one wants to put up taxes while you're trying to stimulate an economy out of recession. But if the budget gap gets too big -- and it has in Ireland -- then international confidence is lost and you need to close that gap urgently.

He says the biggest fear is that Ireland may default on its debts and will have to be bailed out by the IMF.

In London, this is Stephen Beard for 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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