THE WORLD’S PRESS has given extensive coverage to Ireland’s Budget, noting that it marked a crucial political and moral test for the embattled government as it sought to put the €85bn bailout on the home stretch.
London business freesheet City AM calls the proposal “the harshest budget ever proposed” – not indicating whether that accolade refers merely to Irish history or to anywhere in the world – and says the Budget relies “on growth forecasts that several experts – including the European Commission – consider overly optimistic”.
The Wall Street Journal avoids the ‘A word’ and instead calls Ireland’s budget “stark”, noting that some of the “headline-grabbing cuts [were] aimed at appeasing and angry and frustrated Irish public” – but adds that there were “no unpleasant surprises”.
It also quotes an economic advisor from Ernst & Young, Marie Diron, as being critical of the absence of banking reform.
More clarity will need to be brought in the forthcoming week, [...but] the task ahead to bring public finances and the banking sector back to sustainable positions remains daunting.
The BBC’s man in Ireland, Mark Simpson, believes Brian Lenihan “played Santa”, noting that the speed of Lenihan’s delivery made the harsh medicine being prescribed seem less painful.
He seemed to slow down when it came to the positive news – no change to the state old-age pension, and a reduction in the air-travel tax, which will lead to cheaper flights.
During these parts of the December budget speech, Mr Lenihan tried to sound more like Santa than Scrooge.
The Telegraph is slightly less generous, noting that the public sector bears the brunt of yesterday’s measures, and doesn’t think the measures did enough to calm the markets.
“The harsh budget has failed settle fears over the eurozone debt crisis with the single currency weakening again and borrowing cost rising across the board”, its economics editor Philip Aldrick writes, choosing not to mention that the price of Irish government borrowing fell by about 0.2% yseterday, and is set to fall below 8% today.
The Guardian, bluntly, asks whether the Irish “are right to protest” – with immediate poll results showing that 68% of people think Ireland “shouldn’t take the cuts lying down”.
The New York Times, overseas, describes the budget as “one of the strictest… in the nation’s history”, leading with Brian Lenihan’s declaration that the current crisis was “the worst in our history, with few international parallels”.
The plan to “raise taxes and slash government and welfare spending” was the only way, however, that Ireland would be able to qualify for the “$113 billion” aid package from its European partners, it says.
Painting a broader picture, it reports that the unveiling was to the backdrop of “crowds chanting antigovernment slogans and lighting flares”, which “swelled throughout the day”.
CNBC describes the budget as “brutal”, and notes that the result of Ireland’s previous measures had been “an underlying deficit this year of 11.6 percent of Ireland’s gross domestic product, second-worst in the 16-nation eurozone to fellow aid patient Greece.”
The Financial Times, finally (subscription needed), carries some long-term speculation about how Ireland should proceed further.
“Sovereign default, massive bank recapitalisations, and sharply falling real wages are all given as reasons why peripheral euro area countries should hang on to monetary union. Yet, in Ireland’s case, all three are going to happen anyway,” writes Megan Greene.
“Yet, in Ireland’s case, all three are going to happen anyway… if Ireland withdrew from the euro it would actually have reasonably good prospects for growth.”