PARIS (MNI) – The Irish government’s 2013 budget to be unveiled on
Wednesday should put the “end in sight” for the country’s long-running
austerity, Deputy Prime Minister Eamon Gilmore said Tuesday.
Gilmore said that the tough budget measures to announced Wednesday
will mean that Ireland has repaired 85% of the damage to government
finances caused by its property collapse and banking crisis.
“It is the budget that is going to get us to 85% of the adjustment
that has to be made, and will therefore put the end in sight for these
types of measures and these types of budgets,” Gilmore told the Irish
broadcaster RTE.
The 2013 budget is expected to include E3.5 billion in fiscal
tightening, to be achieved by E1.25 billion in tax increases and E2.25
billion in spending cuts, according to media reports.
The budget will mark Ireland’s sixth straight year of austerity and
is the last before Dublin is expected to exit its E67.5 billion Troika
bailout program at the end of 2013.
Ireland will still face adjustments until 2015, when its budget
deficit, expected to be 8.2% of GDP this year, must be brought down to
3%. And it must cope with overall debt – a legacy of the banking crisis
– that is only expected to peak in 2014 at 122% of GDP.
Growth in the economy is expected to pick up to 1.3% next year from
0.5% this year, according to forecasts by the OECD. But the growth is
dependent almost entirely on exports and is not expected to make much of
a dent in the country’s 14.8% unemployment rate.
Among the 2013 budget measures, a new property tax imposed on all
homeowners will make up much of the new revenue.
Most homeowners will face a charge of 0.18% of the value of their
property while those with homes worth more than E1 million will pay a
0.2% tax.
“What we are seeking to do is to protect the most vulnerable and
those that have the most will contribute the most,” Gilmore said.
–Paris newsroom, +33142715540; jduffy@marketnews.com
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