Ireland unveiled the harshest budget measures in its history Wednesday, a four-year plan to slash deficits euro15 billion ($20 billion) so it can get a massive bailout from the European Union and the International Monetary Fund.
The plan seeks to cut euro10 billion ($13.3 billion) from spending and raise euro5 billion ($6.7 billion) in extra taxes from 2011 to 2014. It axes thousands of state jobs, welfare benefits, and pension payments while raising university fees and taxes, forcing even Prime Minister Brian Cowen to concede it will hurt the living standard of everyone in the nation.
Analysts, meanwhile, feared that the size of the EU-IMF bailout — estimated at euro85 billion ($115 billion) — will be too little to save Ireland from an eventual default.
And bank shares plummeted for a third straight day on the Irish Stock Exchange in growing expectation that investors would be wiped out if the government is forced to seize total control of the country's two dominant banks, Allied Irish and Bank of Ireland.
"The government is completely in denial about the amount of money they'll have to borrow," said Constantin Gurdgiev, a finance lecturer at Trinity College Dublin and an economics adviser to IBM in Europe.
Ireland is still negotiating the terms of the bailout with European Central Bank and IMF experts. It hopes the tough budgetary medicine will permit its 2014 deficit to fall to 3 percent of gross domestic product, the limit for the 16 nations that use the euro currency.
While most eurozone members are violating that rule, Ireland's deficit this year is forecast to reach 32 percent, a modern European record, fueled by exceptional costs from Ireland's unfathomable bank-bailout effort.
Expect a few more Irish immigrants soon.