The recent years transformation to knowledge economy from typical agricultural sector helped Ireland to be one of the wealthiest country in European Union. But, It’s the first country in European union entered officially into recession in first half of 2008. The financial crisis 2008 has suppressed severally and affected its economy as well as the standard of living of Irish people. The Irish authorities are unable to tackle the staggered economic situation of the country to save it from the disaster.
Today, Ireland surprised the whole world declaring a high budget cuts of 15bn euros ($21.3bn; £13.1bn) to adjust government deficits. Irish Finance Minister Brian Lenihan declared officially underlining the high budget cuts “strength of our resolve to show that the country is serious about tackling our public finance difficulties. But our spending and revenues must be more closely aligned. This is the only way to ensure the future well being of our society.”
Country’s banking solvency is still in question. It shows a more surprise when it comes to collapse of the Irish property bubble. The country is currently going through a serious economic downfall including high inflation, unemployment and dis-adjustment in promissory notes. The Government declared it would cut 6bn euros in 2011 which’ll help to adjust deficit to 9.25%-9.5% GDP. The Irish authorities are also expecting to reduce another 3% of GDP by 2014. As concerned with the treatment of promissory notes, the govt. further confirmed that the promissory notes will not be chargeable any interest rate in 2011 and 2012.
European Central Bank (ECB) president Jean-Claude Trichet said “The market observers, savers, investors are looking with great, great attention to what the minister and the government will say in a few hours,”. It’s a huge amount and “[The government] needs to deliver these cuts to stabilise its public finances and win its credibility back, but at the same time it will probably push its economy into a deeper recession.” he further added.