December 5, 2011
Ireland faces more heavy cuts in public spending next year, with welfare and health departments taking the brunt of the pain under the country's latest austerity budget outlined on Monday.
The public expenditure and reform minister, Brendan Howlin, said spending would be cut by 2.7%, amounting to €1.4bn (£1.2bn) of reductions, in the first part of a budget which will continue with announcements on tax increases from the finance minister Michael Noonan on Tuesday.
The austerity measures come days before the critical EU summit on Friday which could force Ireland back to the ballot box in the new year. If a new treaty emerges from the meeting of EU leaders, the Fine Gael-Labour government would be obliged to hold a referendum under the Irish constitution. Given the unpopularity of the coalition's cost-cutting programme, there is no guarantee Ireland would endorse the treaty and a rejection could plunge the entire EU into further political and economic chaos.
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