Irish budget cuts expected despite bailout exit

Irish finance minister Michael Noonan is expected to unveil another tough budget later. Noonan and Public Expenditure Minister Brendan Howlin will take a further €2.5 billion (£2.1bn) out of the Republic of Ireland's economy. It is the last budget before the country leaves its EU-IMF bailout programme on 15 December. However, austerity is likely to continue in the form of public spending cuts and tax rises. Leaving the bailout and "regaining economic sovereignty", as the Taoiseach (Prime Minister) Enda Kenny describes it, is unlikely to make much difference to the everyday life of citizens as the state will still have to convince the bond markets that its financial house is in order and therefore worthy of receiving loans.

Much of the good news - and in the current climate there's not much of that - has already been leaked; under-fives are to get universal free medical care and pupil-teacher ratios are to be protected, but it's expected the dole for those under 25 will be reduced.

The Republic of Ireland is, by most definitions, the most indebted country in the world with three inter-linked debt problems - that of the banks, private citizens and the state.

And while the Fine Gael-Labour coalition government is making headway in getting the state's debt under control, it is still borrowing about 1bn euros a month to pay for public services.

The banks' debt problem has not gone away either. Next year's Europe-wide bank stress tests could well result in Irish banks needing further capital, either from the taxpayer or the new European bank bailout fund, the European Stability Mechanism (ESM).

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