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Irish to announce 2bn euro cuts Cowen outlines cuts in spending
(about 5 hours later)
Irish ministers are meeting to decide how to make 2bn euro cutbacks after government talks with unions and employers collapsed on Tuesday moring. A pension levy for state employees in the Irish Republic has been announced as part of a 2bn euro package of public sector cutbacks.
Taoiseach Brian Cowen is expected to make an announcement to the Dail after 1600 GMT when the stock markets close. Taoiseach Brian Cowen said there would also be cuts in expenditure on a number of services, including childcare and the National Development Plan.
Public sector workers may have to pay bigger pension contributions which could make up €1.35bn of the €2bn. His announcement to the Dail came after talks with unions and employers collapsed on Tuesday morning.
This could mean a pay cut of between 5% and 10% - a proposal which proved a stumbling block in early morning talks. Opposition politicians said they were disappointed with the move.
The unions felt these cuts would disproportionately affect those on middle incomes. They earlier demanded a full debate on the government's economic proposals in the Dáil, rather than the series of statements proposed by the taoiseach.
However, Mr Cowen said there would be an opportunity for a full debate on Wednesday.
The pension contributions will save the Irish government 1.4bn euro, according to Mr Cowen.
Talks with the government broke up at 0400 GMT on Tuesday morning.Talks with the government broke up at 0400 GMT on Tuesday morning.
The Irish government must find a further 4bn euro in savings next year.The Irish government must find a further 4bn euro in savings next year.
Mr Cowen is anxious to persuade international bond markets that Ireland should retain its triple A rating and that the government is dealing with the country's financial crisis.Mr Cowen is anxious to persuade international bond markets that Ireland should retain its triple A rating and that the government is dealing with the country's financial crisis.