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| Ireland unveils emergency budget | Ireland unveils emergency budget |
| (10 minutes later) | |
| The Irish Republic has unveiled its second budget in six months to deal with its sharply contracting economy. | The Irish Republic has unveiled its second budget in six months to deal with its sharply contracting economy. |
| The emergency budget included higher taxes and a reduction in spending, to deal with Ireland's budget deficit. | |
| Finance Minister Brian Lenihan also said an independent agency would take over banks' bad assets to try and restore lending. | Finance Minister Brian Lenihan also said an independent agency would take over banks' bad assets to try and restore lending. |
| His forecast for 2009 was also revised down sharply. He expects it to contract by 8% this year, down from 3% in 2008. | |
| Dublin is having to deal with a deepening recession while being forced to correct the worst deficit in Europe. | Dublin is having to deal with a deepening recession while being forced to correct the worst deficit in Europe. |
| The total reduction in gross government spending for 2009 will total 1.8bn euros Mr Lenihan said, while further savings of 4.8bn euros will be required between 2010 to 2011. | |
| Open economy | |
| The finance minister said the key aims of the budget include: | |
| • Putting the public finances in order | • Putting the public finances in order |
| • Restoring the damaged banking system and restoring credit | • Restoring the damaged banking system and restoring credit |
| • Regaining competitiveness, increasing exports and driving down costs | • Regaining competitiveness, increasing exports and driving down costs |
| • Protecting jobs and improving investment in training | • Protecting jobs and improving investment in training |
| • Restoring Ireland's reputation abroad. | |
| The Republic had relied too heavily on the housing sector, which had proved to be a bubble, Mr Lenihan said. | |
| But speaking before the Dail, Brian Lenihan said it would be wrong to assume that it was only the collapse in the housing and construction sector which was to blame for the Republic's recession. | |
| It had been especially hard hit due to the nature of Ireland's small and open economy, he said. | |
| Any future economic recovery would have to be based on a revival in exports. | |
| 'Bad assets agency' | |
| Looking ahead, Mr Lenihan lowered his forecast for economic growth, saying the economy was likely to contract by 8% in 2009, more than a recent forecast of 6.75% and significantly higher than the 3% contraction experienced in 2008. | Looking ahead, Mr Lenihan lowered his forecast for economic growth, saying the economy was likely to contract by 8% in 2009, more than a recent forecast of 6.75% and significantly higher than the 3% contraction experienced in 2008. |
| He said this change marked "a serious decline in national living standards: the sharpest fall on record. Forecasts for 2010 are not as severe". | |
| In light of the deteriorating in the finance sector, Ireland will become one of the first country's in the world to establish an agency which will remove toxic assets from banks. | In light of the deteriorating in the finance sector, Ireland will become one of the first country's in the world to establish an agency which will remove toxic assets from banks. |
| This, the finance minister said, would help give banks a "clean bill of health", reduce uncertainty in the system and try to get credit flowing again to businesses and individuals. | This, the finance minister said, would help give banks a "clean bill of health", reduce uncertainty in the system and try to get credit flowing again to businesses and individuals. |
| Taxes | Taxes |
| As for taxes, he reiterated that those earning the most should pay the most. | As for taxes, he reiterated that those earning the most should pay the most. |
| A person on the minimum wage, about 17,500 euros annually, will be asked to pay 2% of their wages. | A person on the minimum wage, about 17,500 euros annually, will be asked to pay 2% of their wages. |
| Someone earning 50,000 euros per year, 4% of their income, while anyone earning 300,000 euros annually will pay 9% of their income. | Someone earning 50,000 euros per year, 4% of their income, while anyone earning 300,000 euros annually will pay 9% of their income. |
| Mr Lenihan said tax on cigarettes would rise by 25 cents but there would be no increase in duty on alcohol or petrol as he was concerned any rise would lead to a loss of revenue. | |
| He said pay in the public sector had to be reassessed. At the highest level it had become overinflated in recent years and needed to be reduced. | |
| A review of top level pay rates is being launched "to take account of the changed budgetary and economic circumstances, and the changed private sector pay." | |
| Such changes would include reductions in ministerial pensions and expenses arrangements. | |
| Did you watch the budget? What is your reaction? Send us your comments using the form below. | |
| Send us your comments using the form below. | |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |