Monthly Archives: October 2013

So, how big was the budget hit?

Ireland’s 2014 budget was an ode to Janus, the two-faced Roman deity. Not only was it concocted and communicated to simultaneously placate different audiences, it was ostensibly designed to mark the so-called return of sovereignty – peace in our time.

To Ireland’s lenders, current and future, the budget was a clear statement of intent: that the government would continue to meet all its obligations, including a full €3.1bn adjustment in accordance with the letter of the Memorandum of Understanding signed with the troika.

To Ireland’s citizens, it was sold as an alleviation of austerity, a symbol that we will soon have of control over our own destiny. There was ‘only’ €2.5bn in permanent tax hikes and spending cuts, much worse than it could have been. In fact, Ministers Noonan and Howlin announced a mere €1.85bn in ‘new pain’ on budget day – €0.35bn in net new taxes and €1.5bn in spending cuts, a ratio of 4.3 to 1.

Which of these statements are true?

All of them.
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