Irish Finance Minister Brian Lenihan said the country is on the “road to ruin” if it doesn’t act now to rein in spending and control a soaring national debt.
“We need our tax receipts to fund our social program, to fund social welfare, to fund the bounty and incentives that government gives to enterprises,” Lenihan said in a speech in Dublin late yesterday. “We don’t need tax receipts to be preempted as dead money to service a national debt.”
Ireland’s finances are deteriorating as an economic slump erodes tax revenue and pushes up welfare spending while the government pumps billions of euros into the banking system. The country’s cost of borrowing jumped earlier this year and it has lost its top credit rating at Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.
The national debt could more than triple to 160 billion euros ($238 billion) by 2013 from 50 billion in 2008 without government action, Lenihan said. That would leave the country with an “unsustainable” annual interest bill of 10 billion euros, he said.
He also said he’s planning “substantial” cuts for senior government officials. He’ll also introduce a carbon levy, though he has no plans for additional taxes.
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