The Irish Times reports that the EU and IMF have approved the Irish rescue package. Irish Prime Minister Cowen confirmed the European Union has agreed to Irish Government's request for financial aid package from the European Union and the International Monetary Fund. While the package is approved, its size is still undetermined (although the Financial Times thinks its around $100-$120 bn). Even Prime Minister Cowan does not seem to know how large the program will be – but he does know it will be smaller than the Greek bailout package. 

As predicted the arrival of the IMF team and the resulting austerity measures are no marriage made in heaven (see here)  

·        The EU/IMF program calls for

                 – corporation tax rate to remain unchanged at 12.5%

·                                 – 10bn euros (£8.5bn) of spending cuts between 2011-2014, and 5bneuros in tax rises

·                                 – minimum wage to be cut by one euro to 7.65 euros per hour

·                                 – 3bn euros of cuts in public investment by 2014

·                                 – 2.8bn euros of welfare cuts by 2014, returning spending to 2007levels

·                                 – reduction of public sector pay bill by 1.2bn euros by 2014

·                                 – the reform of public sector pensions for new entrants with paycut by 10%

·                                 – 24,750 public sector jobs to be cut, back to 2005 level

·                                 – VAT up from 21% to 22% in 2013, then 23% in 2014

·                                 – raise an extra 1.9bn euros from income tax

·                                 – abolition of some tax reliefs worth 755m euros

·                                 – real GDP to grow by an average of 2.75% from 2011 to 2014

            –  unemployment to fall from 13.5% to below 10% in 2014