Mon, Jan 31, 2011 - Page 10 News List

Irish Finance Bill passes, clears way for EU-IMF bailout

AP, DUBLIN

The upper house of the Irish legislature has passed a contentious Finance Bill needed to comply with terms of a massive international bailout package for the country, Irish state television reported.

The Finance Bill was designed to comply with the terms of an EU-IMF loan, which is contingent on Ireland cutting 15 billion euros (US$20.56 billion) from its deficit spending over the coming four years and the country imposing the harshest cuts this year.

The vote was 30-20, Raidio Teilifis Eireanne said.

The bill’s passage was expected. Irish Prime Minister Brian Cowen has said he will seek dissolution of the legislature tomorrow, setting the stage for a national election. Cowen’s Fianna Fail is expected to take a drubbing.

The party has long dominated, but Cowen, who was Ireland’s finance minister from 2004 to 2008, is widely blamed for Ireland’s stunning slide.

The measure included a 90 percent tax on bonuses paid to employees of Irish banks needing state support to survive after a runaway property market collapsed.

The government proposed the tax last month following uproar over news that Allied Irish Bank, the beneficiary of a 3.7 billion euro bailout, was about to pay bonuses to more than 2,000 executives totaling 40 million euros.

The idea was dropped, but revived on Wednesday to secure the votes of two independent legislators, clinching passage of the bill in the lower house.

The parliament has already approved cuts in welfare benefits, the minimum wage and salaries of Cabinet ministers, and it has raised school fees. However, the Finance Bill will increase income taxes across the 2 million-strong work force, raising effective tax levels to 41 percent or more.

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