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The Black Hole Of Ireland...Irish Economy...Recession Looms...

The Irish Examiner mentions in a report today:

SURGING unemployment and sliding tax returns helped blow a €5.6bn black hole in Government finances last night...

The opposition’s ire focused on Mr Cowen, who had been Finance Minister up to May, rather than Mr Lenihan.

Labour leader Eamon Gilmore accused Mr Cowen of “walking the country into the red”.

Fine Gael finance spokesman Richard Bruton said Mr Cowen had to take personal responsibility for the scale of downturn as he had introduced four inflationary budgets designed to meet the needs of the “electoral cycle, not the economic cycle”.

These budgets had used the unsustainable revenues from the property boom to “ramp up spending increases” at twice the rate of growth of the economy, Mr Bruton said.




The Irish Independent paints a similar gloomy black hole picture...

MINISTERS will have to cut €500m from their spending plans to pay for increased dole payments, as the property slump blows a €3bn black hole in their tax take.

Department of Finance officials now expect the jobless queues to lengthen by an average of 5,000 a month for the rest of the year, bringing the average number on the Live Register to 210,000...

...But that depends on the rest of the economy -- outside of building and property -- holding firm. A string of other bad news yesterday suggested it may not: Stock markets slumped again, with the Dublin market falling to its lowest level in five years.

The falls were led by building companies, as the outlook for property markets worsened in Ireland and Britain.

...With interest rates set to rise today, European Central Bank president Jean-Claude Trichet seemed to warn that more may follow, saying inflation could "explode" without decisive action by central banks...

...The Exchequer returns show tax revenues were €1.45bn short of expectations in the first six months of the year. Taxes from property and construction were almost entirely to blame...

...Fine Gael said the mid-term Exchequer figures "show conclusively" that the Taoiseach had blown the boom and brought about "the worst deterioration in our public finances in the history of the State". Labour said the figures "paint a sorry picture of Brian Cowen's stewardship of the economy."

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