Irish Republic budget vote on knife-edge
Baku, December 7 (AZERTAC). The Irish Republic is set to unveil more details of its controversial budget cuts.
The ruling Fianna Fail party is due on Tuesday to present what will be the toughest budget in Dublin`s history.
Finance Minister Brian Lenihan is planning an initial 6bn euros (£5bn) of cuts in welfare spending and job losses.
It is part of a deal to secure an 85bn-euro bail-out, but Fianna Fail`s slim majority means the vote could be close.
Once the budget is cleared by parliament it will trigger the first tranche of bail-out funds from the European Union and International Monetary Fund.
The government previously announced cuts under a four-year National Recovery Plan unveiled two weeks ago.
Dublin is looking to save about 15bn euros over the period as it struggles to balance the books.
But on Tuesday, prime minister Brian Cowen`s government is to announce its spending programme for this financial year, having already warned that 2010/11 is likely to see the biggest cuts of the four-year plan.
The Irish Republic`s generous welfare budget is a prime target for the axe.
Child benefit is being slashed, and social welfare spending - state pensions excluded - is being cut by 5%.
Thousands of public sector jobs will go. Civil service pay freezes will be imposed, and reform of the tax system will bring thousands of Irish people into the tax net. The minimum wage will be lowered.
Mr Cowen says the cuts are necessary because the Irish Republic was living way beyond its means.
Surging bond yields - the interest rates Dublin pays to borrow money - forced the government to ask for a bail-out on 28 November, as the Republic could no longer afford to raise money in the financial markets.
Mr Cowen, with his poll rating at a record low, needs to push the budget through to avoid having to call a snap election.
Failure to do so could plunge the Republic into a deeper crisis, one that could help spread contagion throughout the heavily-indebted eurozone.
Mr Cowen`s government only has a majority in the Dail, or lower house of parliament, thanks the support of two independent MPs.
One of these MPs, Michael Lowry, pledged his support for the budget on Monday evening.
"The consequences of not passing a budget would be disastrous for Ireland and its people," he said in a statement.
"Despite some adverse reaction in my constituency to this decision I feel duty bound to put the country`s interests first."
The other independent MP, Jackie Healy-Rae, had yet to comment on whether he will vote for the budget.
And it is not clear if all opposition MPs will oppose the budget. There has been talk of some MPs abstaining from the vote, strengthening Mr Cowen`s hand.
But it is not essential that all parts of the budget are cleared on Tuesday.
The vote will be conducted via four separate ballots, and the budget must be passed within four months of Mr Lenihan presenting it to parliament.
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