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Page last updated at 13:33 GMT, Thursday, 16 July 2009 14:33 UK

Irish report calls for 17,300 job cuts

By Julie Kirby
BBC Northern Ireland Dublin correspondent

Irish Finance Minister Brian Lenihan
Irish Finance Minister Brian Lenihan faces a huge defecit

It has been a troubled year for the Irish government.

Each month adds more gloom to the economic picture: a rising jobless tally, predicted to hit 15% or higher; predictions of further shrinkage in gross national product; credit ratings downgraded, making borrowing even more expensive.

The people are upset, with trade unions threatening industrial unrest.

Two budgets in less than 12 months saw the imposition of levies on wages, levies on pensions for public sector workers and cuts in public spending.

But the gap between what is paid in to government coffers and what is paid out is still enormous - about 20bn euros to be exact.

That means approximately 50m euros a day is borrowed to make up the difference.

Merger

Last November, the government set up the Special Group on Public Service Numbers and Expenditure programmes - the name didn't catch on, and was quickly dubbed An Bord Snip Nua.

Chaired by an economist from University College Dublin it was tasked with identifying 3.5bn euros of cuts in spending.

On Thursday, the report was made public and it is likely to provoke a furious reaction from all sectors.

The report recommended a radical reorganisation of many public bodies, such as the merger of some local authorities, along with the abolition of the Department of Community, Rural and Gaeltacht Affairs.

Explosive

But the really explosive areas are 5% cuts in social welfare payments and the axing of more than 17,300 public service jobs.

Unions say these workers already bear the brunt of expenditure cuts - and cuts to social welfare payments are seen as targeting the vulnerable.

Ireland's largest public service union, Impact, has already threatened industrial action if the government attempted to impose public service pay cuts, pension reductions or compulsory redundancies.

Finance Minister Brian Lenihan said the choices were not "simple or pain-free".



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