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| Version 1 | Version 2 |
|---|---|
| Euro slide continues as Irish debt fears persist | Euro slide continues as Irish debt fears persist |
| (about 1 hour later) | |
| The euro has continued its slide against the dollar as investors digest the Irish Republic's austerity plan. | The euro has continued its slide against the dollar as investors digest the Irish Republic's austerity plan. |
| The currency fell by almost half a cent to $1.3325, and has now fallen by more than three cents this week. | The currency fell by almost half a cent to $1.3325, and has now fallen by more than three cents this week. |
| The four-year Irish plan is designed to save 15bn euros ($20bn; £13bn) through spending cuts and tax rises, but investors remain unconvinced. | The four-year Irish plan is designed to save 15bn euros ($20bn; £13bn) through spending cuts and tax rises, but investors remain unconvinced. |
| The government is also negotiating a bail-out package with the European Union and International Monetary Fund. | The government is also negotiating a bail-out package with the European Union and International Monetary Fund. |
| This is expected to be worth about 85bn euros. | This is expected to be worth about 85bn euros. |
| Investor fear | Investor fear |
| The austerity measures are designed to reduce the Republic's budget deficit, which is the highest in the eurozone. | The austerity measures are designed to reduce the Republic's budget deficit, which is the highest in the eurozone. |
| However, there are doubts about the Irish government's growth estimates, which directly impact its deficit forecasts - many investors see them as overly-optimistic. | However, there are doubts about the Irish government's growth estimates, which directly impact its deficit forecasts - many investors see them as overly-optimistic. |
| The government still expects the economy to average 2-2.5% growth in 2011, and 3.5-4.5% the year after, whereas rating agency Standard & Poor's has said it expects virtually no growth over the next two years. | The government still expects the economy to average 2-2.5% growth in 2011, and 3.5-4.5% the year after, whereas rating agency Standard & Poor's has said it expects virtually no growth over the next two years. |
| There also are also doubts about the whether the government will be able to push through its austerity measures when parliament votes on the budget on 7 December. | There also are also doubts about the whether the government will be able to push through its austerity measures when parliament votes on the budget on 7 December. |
| Compounding this uncertainty are fears that the Irish debt crisis will spread to other countries with high deficits, in particular Portugal and Spain. | Compounding this uncertainty are fears that the Irish debt crisis will spread to other countries with high deficits, in particular Portugal and Spain. |
| All these factors are putting pressure on the euro. | All these factors are putting pressure on the euro. |
| Tax rises | Tax rises |
| In total, the spending cuts announced in the recovery plan will amount to 10bn euros, while tax rises will bring in a further 5bn euros. | In total, the spending cuts announced in the recovery plan will amount to 10bn euros, while tax rises will bring in a further 5bn euros. |
| The cuts include 2.8bn euros of savings in social welfare spending, 24,750 public sector jobs cuts and a 1 euro reduction in the minimum wage, to 7.65 euros an hour. | The cuts include 2.8bn euros of savings in social welfare spending, 24,750 public sector jobs cuts and a 1 euro reduction in the minimum wage, to 7.65 euros an hour. |
| The tax rises include an extra 1.9bn euros from income tax changes, an increase in VAT from 21% to 22% in 2013, and to 24% in 2014, and a new "site value" property tax to raise 200 euros from most homeowners by 2014. | The tax rises include an extra 1.9bn euros from income tax changes, an increase in VAT from 21% to 22% in 2013, and to 24% in 2014, and a new "site value" property tax to raise 200 euros from most homeowners by 2014. |
| The government has already implemented 15bn euros of cuts in the last two years. | The government has already implemented 15bn euros of cuts in the last two years. |
| The measures have proved deeply unpopular with the electorate, and junior government partner, the Green Party, has called for a general election in January. | The measures have proved deeply unpopular with the electorate, and junior government partner, the Green Party, has called for a general election in January. |
| Voters go to the polls later in a by-election in Donegal to elect a new TD (MP) to the Irish Parliament. |