Irish cabinet meets

IRELAND: Ireland’s cabinet holds an emergency meeting Sunday to finalise a four-year deficit crisis plan seen as key to winning an international bailout and easing fears about the future of the euro.

The meeting comes as the Irish officials hold a fourth day of tense talks with the European Union, European Central Bank (ECB) and International Monetary Fund (IMF) on financial assistance worth tens of billions of euros.

Concerns are growing that the huge deficit racked up by the one-time “Celtic Tiger” as it tried to save its banks could have a knock-on effect on other weak economies like Portugal, echoing the Greek crisis earlier this year.

A spokesman for the government of Prime Minister Brian Cowen said the Irish cabinet would meet “in the middle of the afternoon” to finalise its austerity measures, with reports saying an announcement was expected on Tuesday.

The cabinet would not discuss the international bailout “but the two (issues) are related,” the spokesman said.

The new austerity drive is looking to save 15 billion euros up to 2014.

Dublin has pumped some 50 billion euros (68.4 billion dollars) into the country’s stricken banks, pushing its public deficit to 32 percent of output — more than 10 times the EU limit.

Cowen said Saturday that the four-year plan was “very well advanced”, adding that its outline had already won the approval of EU economic affairs commissioner Olli Rehn.

The international mission is subjecting Ireland’s books to forensic analysis, with Cowen’s government trying to deflect fears about a loss of sovereignty while defending a wafer-thin parliamentary majority.

AFP