Budget Cuts Loom Later

It is widely anticipated that the most severe Budget in the State's history will be announced later today.

Billed as a recession-beater it will make immediate savings of €4bn (£3.6bn; $6bn) to stabilise the economy.

However, it will be painful, as the government has said social welfare and capital expenditure will be cut.

In addition, industrial trouble looms as the Budget comes amid threats of industrial action by public sector workers who could face pay cuts of up to 6%.

Even members of the police force said they were considering becoming involved, after government talks with union leaders collapsed on Friday.

Finance minister Brian Lenihan said severe measures were needed to prevent debt growing from almost 12% of GDP - already four times the level allowed by the European Union - to 14%.

It is thought salaries of the highest-paid public sector employees could be reduced by up to 20%.

It is expected social welfare payments will be cut by about 4% and child benefits by about 9%, as well as a reduction in payments to the unemployed under 23. Old age pensions are the only area to be unaffected.


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