IRELAND:The Government's budget for 2010 presented in December projected a deficit of 11.6 per cent of gross domestic product. The median forecast of analysts polled by Reuters is for Ireland's budget deficit to come in at 11.5 per cent. Fiscal reform so far: three austerity budgets presented in little over two years, in October 2008, April 2009 and December 2010. With the first two budgets focused on tax rises, December's budget for 2010 drew most praise as it delivered spending cuts of €4 billion, including a cut in public sector pay. Fresh savings worth €3 billion are planned for each of 2011 and 2012.
FRANCE
French president Nicolas Sarkozy (below) has said France will look to restore its public finances as the economic recovery takes root.
In an effort to keep a lid on the budget deficit, France has said it will freeze all spending, bar pensions and interest payments, between 2011-2013 and cut state operating costs by 10 per cent. Sarkozy has said this does not amount to an austerity plan.
PORTUGAL
Portugal’s prime minister Jose Socrates and opposition leader Pedro Passos Coelho drew up steps to slash the budget deficit (including 5 per cent pay cuts for senior public sector staff and politicians, and increases of VAT sales tax, income tax and profits tax ranging from 1 to 2.5 per cent).
The cabinet approved the programme. The government said it would cut the deficit to 7.3 per cent of GDP in 2010 and 4.6 per cent in 2011. In 2009 it hit 9.4 per cent, prompting a sell-off of Portuguese assets by investors.
SPAIN
Spain’s prime minister Jose Luis Rodriguez Zapatero (left) announced on Wednesday fresh spending cuts totalling €15 billion in 2010 and 2011. Civil service salaries will be cut by 5 per cent in 2010 and frozen in 2011, while more than €6 billion will be cut from public investment.
The cuts are aimed at speeding up fiscal consolidation and meet Spain’s revised deficit targets of 9.3 per cent of GDP in 2010 and 6 per cent in 2011, compared with 11.2 per cent in 2009.
Public debt as a percentage of GDP is seen at 65.9 per cent in 2010, rising to 7.19 per cent in 2011.
GREECE
Greece has approved a pension reform bill, after agreeing with the European Union and the International Monetary Fund a fresh set of austerity measures aimed at pulling the country out of a severe debt crisis that has shaken the euro zone.
Under the EU-IMF deal, Greece plans to narrow its budget shortfall from 13.6 per cent of gross domestic product in 2009 to 8.1 per cent this year, 7.6 per cent in 2011 and 2.6 per cent in 2014.
Austerity measures include a public sector pay freeze until 2014. Christmas, Easter and summer holiday bonuses, also known as 13th and 14th salaries, are abolished for civil servants earning above €3,000 a month and are capped at €1,000 for those earning less.
Public sector allowances are cut by an additional 8 per cent. These allowances, which account for a significant part of civil servants’ overall income, were cut by 12 per cent under a round of austerity measures announced in March.
The main VAT rate is increased by 2 percentage points to 23 per cent.
It had been raised to 21 per cent from 19 per cent in March.
Excise taxes on fuel, cigarettes and alcohol are increased by a further 10 per cent.
The government expects to generate additional revenues through a one-off tax on highly profitable companies, as well as new gambling and gaming licences and more property taxes.
The government has said it will freeze pensions in 2010, 2011 and 2012.
According to the pension bill, expected to be voted by parliament in June, the statutory retirement age for women will be raised by five years to 65 to match the retirement age for men. – (Reuters)
