Ireland braces for deep budget cuts to secure EU bailout

Ireland is to unveil details of a new set of tax hikes and spending cuts amounting to 6 billion euros. The Irish government is revealing the country's toughest austerity regime yet in a bid to secure a European Union bailout and save 15 billion euros over the next four years.

Reuters

Security was beefed up outside the Dail or the lower house of parliament ahead of the vote on the Ireland’s budget.

Early on Tuesday morning, a demonstrator was arrested after parking a small crane outside the Irish parliament to protest the cuts, the Irish broadcaster RTE reported.

The Fianna Fail/Green party coalition led by Prime Minister Brian Cowen has a slim majority but has secured the support of two key independent lawmakers needed to pass the budget.

"Our country is in grave economic danger. I feel duty bound to put the country's interests first. Failure to pass a budget would lead to further economic failure," said independent Michael Lowry.

Finance Minister Brian Lenihan is to unveil the cuts later on Tuesday amid anxiety on financial markets over the health of the Irish economy and the government’s vast debts.

On Tuesday, ministers from the 27 European Union nations formally adopted Ireland's 85-billion euro bailout plan setting out the conditions that Dublin must meet in exchange for financial aid.

The deal with the EU and the International Monetary Fund has angered citizens as it consists of 67.5 billion euros in external loans and guarantees, plus 17.5 billion taken mostly from Ireland's public pension fund.

After the budget, Irish lawmakers will hold a series of votes on the measures over the coming weeks, including Tuesday's initial vote.