Ireland rolls out a scaled-back budget

People walk past the front of the Government buildings in Dublin, on November 23, 2010. Irish Prime Minister Brian Cowen was fighting to keep his government together Tuesday after his call for an election early next year failed to stem the political crisis over an international bailout.

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STEVE CHIOTAKIS: The Irish government has unveiled an bare-bones, scaled back 4-year budget that'll knock back $20 billion using new taxes and spending cuts. Ireland is hoping to get a European and International Monetary Fund bailout to the tune of $115 billion.

From Dublin, the BBC's Louise Williams reports.


LOUISE WILLIAMS: The Dublin press conference was packed. The words "Plan for recovery" and "Securing Ireland's future" flashed on the screan behind Ireland's Prime Minister, Brian Cowen.

BRIAN COWEN: I am hopeful for the future that this plan is another confidence building measure. Another signpost along the road towards national recovery.

The four year plan includes a host of major cuts, radical reductions in public spending, a restructuring of tax brackets, higher university fees and trimming the Irish minimum wage by more than a dollar. This massive restructuring of public spending is meant to reassure skeptical investors. Shares in one of the biggest banks, the Bank of Ireland, tumbled by a whopping 23 percent yesterday as investors expressed pessimism. They've fallen even further today.

The tone of the four year budget was all optimism. It even predicts that the Irish economy will grow this year. All eyes to the markets now to see which side they believe.

In Dublin I'm the BBC's Louise Williams for Marketplace.

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