April 07, 2009

Ireland primed voters for years of higher taxes and curtailed public services as it seeks to chop between 3.5-4 billion euros ($4.7 billion to $5.4 billion) off the worst public finances in Europe this week."In the coming months and years we will be asking people to take the strain, to make more sacrifices. Everyone will have to do that according to their ability to pay but no one will be immune from the challenge," Prime Minister Brian Cowen said in a webcast late on Sunday.

The government has warned that Ireland's deficit could hit 23 billion euros this year or 12.75 percent of Gross Domestic Product (GDP), five billion euros worse than feared in January and easily the bleakest in the European Union, unless action is taken.But a source told Reuters late on Friday that Dublin would not swing the axe as much as previously expected and the bulk of the savings in Tuesday's budget would be derived from tax increases rather than the spending cuts favoured by the central bank and economists.