Ireland unveils 4-year ‘National Recovery Plan’ for €85-billion bailout

Yielding to the demand of the European Union and the International Monetary Fund for securing an €85-billion bailout of the nation's struggling lenders, the Irish government has unveiled a 'National Recovery Plan 2011-2014', which outlines the proposed measures to emerge from the present financial crisis and return to economic stability.

The plan, described as a 'blueprint for a return to sustainable growth in the country's economy', was revealed Wednesday in Dublin by the Irish prime minister Brian Cowen.

The county's elections are due early next year, and Cowen is vigorously pushing forward to conclude the bailout deal, and get the backing for his budget next month.

The proposed plan aims to reduce Ireland's budget deficit to 3 per cent of gross domestic product (GDP) by the end of 2014 from the present level of around 12 per cent, through spending cuts in social welfare and public spending, and tax increases.

The crisis was triggered by large-scale sub-prime lending by Irish banks for housing and construction projects resulting in the financial turmoil.

The prime minister urged the nation to ''pull together as a people to confront this challenge, and do so in a united way.''

Broadly, the recovery plan sets out measures that will be taken to restore order to the nation's public finances, identifies the areas of economic activity that will provide growth and employment, and specifies the reforms the government will implement to accelerate growth in those key sectors.

Through the measures, the government plans to slash public spending by €15 billion over the next four years, of which €10 billion will be saved by way of spending cuts, and €5 billion by way of tax increases.

It has also said that the adjustment in the forthcoming budget for 2011, to be delivered in the Irish parliament next month will be €6 billion.

Cowen stressed that the economic recovery in Ireland will be ''export-led''. The nation's exports are expected to register a 6-per cent increase in the current year over the previous year.