Latest Channel 4 News:
Row over Malaysian state's coins
'Four shot at abandoned mine shaft'
Rain fails to stop Moscow wildfires
Cancer blow for identical twins
Need for Afghan progress 'signs'

Irish economy 'to shrink by 8%'

Source ITN

Updated on 07 April 2009

Ireland's Finance Minister has said the former Celtic Tiger's recession is so severe that its economy will shrink by a record 8 per cent this year.

Delivering the third emergency budget in nine months, the Irish Government has announced tax rises and spending cuts of 3.25 billion euro (£3bn) in a bid to rescue the country.

In a 40-minute speech, Brian Lenihan said Ireland would get its deficit under European Union limits by 2013 and much of the fiscal pain would be felt in 2010 and 2011, with the bulk of savings to be squeezed from spending.

Mr Lenihan said levies on income will be doubled to 2 per cent, 4 per cent and 6 per cent to yield an extra 1.3 million euro (£1.1m) in 2009.

He said: "We must stabilise our public finances. Until we show that we can put our own house in order, we cannot expect those who have invested here and who might invest here in the future to have confidence in us."

Mr Lenihan hopes the cuts will leave Ireland with a budget deficit of 10.75 per cent of Gross Domestic Product (GDP) in 2009 - far above an original goal of 9.5 per cent and still the worst in Europe.

Without the measures, Dublin had said the shortfall would hit 12.75 per cent of GDP.

Ireland will also set up a "bad bank" to take on up to 90 billion euro (£81bn) in toxic property debts in an attempt to restore stability to the economy.

Former Bank of England deputy governor Sir Andrew Large has been called in to help find a new financial regulation chief within a reformed Central Bank of Ireland.

© Independent Television News Limited 2009. All rights reserved.

These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.

Send this article by email

Watch the Latest Channel 4 News

Watch Channel 4 News when you want

Latest World news

More News blogs

View RSS feed

Pakistan floods

A boy puts cream on in his face during the Pakistan floods (Reuters)

Powerful reports from Jonathan Miller inside Pakistan.

Fears over Taliban deal


Lindsey Hilsum reports on the cost of a Taliban deal.

Iran stoning reprieve


A campaign to save a woman from stoning wins her a reprieve.

Crisis as famine looms


The worst drought in memory grips Niger, Mali
and Chad.

Afghan civilian casualties


British compensation payments to Afghan victims "treble".

Amnesty award success


Channel 4 News wins Amnesty awards for Sri Lanka reports.

Tamil killings 'ordered'


Sri Lanka commander says killings were 'ordered from the top'.

Somalia aid probe


The UN finds corruption is diverting Somali food aid.

Twittering on

Start following Channel 4 News on Twitter today.

Click to launch.


Most watched


Find out which reports and videos are getting people clicking online.

Channel 4 © 2010. Channel 4 is not responsible for the content of external websites.