The Magnitude of the Problem

Abstract

The Macroeconomic and Fiscal Framework document accompanying the April 2009 Supplementary Budget detailed the measures that had been taken since July 2009 to address the weakening public finances. They included: July 2008 – delivered savings of €400 million in 2008 and €1 billion in 2009. October 2008 – Budget 2009 delivered strict containment of expenditure and a range of revenue raising measures of almost €2 billion. January 2009 – published the Addendum to the Irish Stability Programme Update setting out a medium-term plan to return the General Government Deficit below the 3% of GDP deficit limit by 2013. Underpinning that plan was the need to find savings of up to €2 billion in 2009. February 2009 – expenditure savings of €2 billion in a full year announced. The most significant component of this package was the introduction of a pension-related pay deduction for public servants. In addition, the postponement of the next round of the Social Partnership pay agreement „Towards 2016. secured savings on the pay bill. In 2010 these are estimated to achieve up to €1 billion in savings.