The deadline for Ireland to reduce its budgetary deficit to 3 per cent of GDP has been extended by one year to 2015 under the terms of an agreement on a €85 billion bailout from the EU/IMF.
The terms of the deal, outlined in the Joint EU/IMF Programme for Ireland, sets out a number of reforms to the State’s fiscal structures and the Irish labour market.
It states the extension on the budget deficit was based on a more cautious growth outlook for next year and 2012 coupled with the interest repayment costs required on the borrowings for the additional bank recapitalisations.
Among the structural reforms set out in the document is the requirement to introduce a fiscal responsibility law with “binding multi-annual ceilings on expenditure in each area”.
It also requires that any additional revenues available to the exchequer must be allocated to debt reduction.
The establishment of a budgetary advisory council to provide an independent assessment of government forecasts is also required.
In terms of labour market reforms, the document closely follows many of the measures outlined in the four-year plan which was published last week.
The programme commits the Government to reduce the national minimum wage by €1 per hour – as set out in the four-year plan - and calls for an enlargement of the scope of the inability to pay clause.
Another reform is the incentivisation of those on social welfare to get off social welfare and the application of sanctions for those on benefits who do not comply with job-search requirements.
It also calls for the removal of barriers to competition in some professions and calls for the establishment of an independent regulator for the legal profession.
The removal of restrictions on the number of GPs qualifying from college and allowing GPs to advertise.
With regard to general business competition the plan wants judges to be given the power to impose fines and other sanctions in competition cases to create a more credible deterrence.