8.45am: Good morning, and welcome to today's live coverage of the Irish financial crisis.

Later today, Ireland's government will unveil its four-year austerity programme. The €15bn fiscal plan is expected to include deep cuts to public spending and benefits, and significant tax hikes. It will pave the way for a huge bailout package from the International Monetary Fund and the European Central Bank.

It is unclear whether the package will reassure the financial markets, who are already eyeing Portugal and Spain as the next casualties. But for many of Ireland's citizens, the pressing questions are these - just how much pain will this four-year plan inflict on me, and can we avoid a full-scale economic slump?

We'll also be bringing the latest news from Portugal, where a massive general strike is taking place today.

9.01am: Details of the IMF/EU bailout for Ireland broke around midnight. It is expected to be worth around €85bn in total, with Britain contributing up to £10bn.

Some €48bn would be used to fund the government deficit over the next three years, while between €15bn-20bn will be pumped into Ireland's banks as fresh capital. Up to €20bn would also be provided as an extra "contingency fund", which Ireland could tap as needed over the next few years.

The Irish finance ministry has been describing these estimates as "premature" this morning, arguing that the precise details are still being hammered out.

9.14am: Another development overnight - Standard & Poor's hit Ireland with a credit rating downgrade.

S&P cut its rating on Ireland's long-term debt by two places, from AA- to A [so from its fourth notch to its sixth]. It also cut its rating on Ireland's short-term borrowing.

S&P explained that it made the cut because Ireland's total borrowing will soar over its previous estimates. It also warned that the Irish state will struggle to unravel the mess in its banking sector.

[The bailout] might instil confidence in financial sector liquidity but will in our view not reduce the government's large contingent liabilities of eliminate the negative macroeconomic pressures weighing on asset quality.

It appears that the Irish state will own almost all of Allied Irish Banks once the rescue package has been implemented, as well as a majority stake in Bank of Ireland.

9.28am: The fiscal plan will be announced at 2pm, the Irish finance ministry just said. Lisa O'Carroll in Dublin has more detail about how the €15bn package might be structured:

Spending cuts are expected to total around €10bn, with the remaining €5bn to be achieved through tax. Income tax is expected to be increased and the tax base widened. Those on the minimum wage could be brought into the tax regime. A property tax of at least €300 year - similar to the poll tax introduced by Margaret Thatcher in the 1980s - is expected to be on the cards. The plan is also expected to include cuts of €800m to social welfare cuts next year, hitting public sector pensions, but not the state pension. There are also reports there will be a 12% cut in the dole but the corporate tax of 12.5% will stay. Elswhere the expected takeover of AIB and Bank of Ireland is fuelling fears in Ireland of a bank run, even though deposits of up to €100,000 are protected by the EU-backed government guarantee.

9.50am: There's a real sense of nervousness in the financial markets this morning, and Irish government bonds are being hammered. The yield [or rate of return] on the 10-year bond just hit 9% - a clear sign that traders are losing faith in Ireland's ability to repay its borrowings.

Yesterday this yield had been sliding towards the relative safety of 8%.

For comparison, the Irish 10-year yield was hovering between 4.5% and 5% at the start of this year., but has spiked since August [ I'll post a graphic to show this shortly You can see a graphic here - thanks to nutsch (below) for stepping in while I struggled with the Reuters terminal].

The Greek 10-year yield, incidentally, is just over 12% today, while Germany's remains at just 2.5%.

10.15am: The Irish debt crisis is continuing to reverberate across the eurozone. Spain is the biggest concern. The cost of insuring its debt hit a record high this morning, despite finance minister Elena Selgado's attempts to calm the panic.

Selgado insisted that the financial markets should focus on Spain's "fundamentals", including a rather more secure banking sector than Ireland:

The data is there. The reforms and austerity are having exactly the results we expected. Spain's economy is very different from that of Greece or Ireland.

I can remember wise heads insisting that "Ireland was not Greece", but that didn't prevent the current crisis.....

And despite Selgado's comments, Spain's five-year credit default swaps (used to insure its debt against default) hit a record high of 312 basis points - up 10bp so far today. Portugal's CDS also hit a new lifetime high of 510bp, up 21bp.

In short - the financial markets believe there's more and more chance of debt defaults and devaluations.

10.30am: Even Belgium is feeling the heat from the Irish crisis -- the cost of insuring Belgian debt against default just hit a record high.

The hitherto obscure Belgian five-year credit default swap jumped by 7 basis points to 155bp [which means it costs €155,000 to insure €10m of its sovereign debt for five years*].

No-one is seriously suggesting (yet) that Belgium is at risk of default - but the uncertainty in Ireland is spooking the City, according to Markit analyst Gavan Nolan:

Fears of contagion permeate the market, despite the [Irish] bailout earlier this week.

* - Corrected

10.36am: To feel the fury in Ireland about the demise of the Celtic Tiger, just check out the Irish Daily Star.

Yesterday they condemned the Irish government as "Useless Gobshites", after Brian Cowen refused to bow to pressure to resign.

This morning's front page (left) is similarly dripping with fury - warning that Ireland is about to bring the whole eurozone crashing down.

10.50am: Irish bank shares have plunged again this morning, after the first details of the IMF €85bn bail out were revealed.

Shareholders are racing to get out of Allied Irish Banks this morning, sending its shares down by another 22% to €0.256. AIB is expected to become 99 per cent owned by the state as a result of the recapitalisation plan.

Shares in Bank of Ireland have slumped by 33% to €0.2. Ireland's biggest lender is currently 36% owned by the state, but that stake is set to rise above 50% as part of the IMF rescue deal.

Lisa O'Carroll has more from Dublin:

Economist David McWilliams, one of the few that correctly predicted the property and economic collapse, said today Irish bank shares would not be worth anything "for a long time". A strong critic of government policy, he said the bail out has left Irish society "cannabilising itself" with taxpayers paying the price for years of reckless banking. The €85bn bail out involves "stuffing" the six state banks with money to take their Tier 1 capital reserves up from 8% to 12% -- one point above the Basel III rules. It means for every €100 euro the bank lends, it must have €12 euro on deposit.

11.06am: Ireland's battered prime minister, Brian Cowen, has just confirmed that a rescue package in the region of €85bn is being debated with the IMF and the European Central Bank.

Cowen, who has so far avoided a direct challenge to his leadership from his own Fianna Fail party, address the Irish parliament about the bailout talks:

The size of any programme has not been decided but an amount of the order of 85 billion has been discussed. Negotiations are continuing, these talks are proceeding as quickly as possible but we have to see how it can be finalised before government can consider the matter further.

11.34am: Mark Hoban (left), the UK City minister, has met with the Northern Ireland Secretary Owen Paterson this morning about the £10bn loan that Britain is expected to offer the Republic.

The talks, at Stormont, are likely to have focused on concerns that Northern Ireland's banks might suffer once those in the South benefit from the recapitalisation plan.

The Press Association has more details:

The meetings come against a background of concerns over the impact that financial turmoil in the southern economy is likely to have north of the Irish border. Mr Hoban will brief First Minister Peter Robinson and Deputy First Minister Martin McGuinness. He will also hold discussions with DUP Finance Minister Sammy Wilson and his party colleague Enterprise Minister Arlene Foster. Earlier this week Ms Foster called for conditions to be attached to any loan to ensure a consolidation of the Republic's banking sector does not cause further financial sector job losses in Northern Ireland.

11.55am: Out in Portugal, a general strike has disrupted public services and brought transport links to a standstill today as workers express their anger at the tough cutbacks being implemented by the Portugese government.

Giles Tremlett is covering the situation in Lisbon:

Only a handful of ferries have crossed the Tagus bringing commuters into rainy Lisbon this morning, as the biggest general strike in more than two decades started with success for trades unions. Rubbish remains uncollected, the metro is at a near standstill and very few people can be seen at the Cais do Sodré rail station that brings commuters in from coastal towns. Flights to Lisbon and other airports have been cancelled as a suitably grey morning marks one of the worst days in Portugal's painful economic crisis. Unions claim that up to 85% of workers have stayed home in some sectors. Hospitals are providing mimimum services and some large factories have halted production lines. As workers protest at the cuts that come with the 2011 austerity budget, debt vigilantes continue to push up the cost of Portugal's borrowing. The interest rate charged on 10-year Portugese debt rose above 7% today, a level widely considered unsustainable. Portugal's minority socialist government, led by Prime Minister Jose Socrates, continues to insist they do not need a bailout, but markets suggest otherwise. The chances of Portugal eventually asking for help are now "above 50 percent", according to Phyllis Reed of private bank Kleinwort Benson. Economist say there may be no immediate need for a bailout, but some investors think it should be asked for sooner rather than later. "Portugal will pull through," said one foreign investor. "They should take the bailout at once. It would be cheaper, so grab it while it is there. Better to have the IMF and EU impose structural reforms than expect a minority government to do it."

12.15pm: The euro has fallen to a two-month low against the dollar today. The single currency lost more than a cent to trade as low as $1.3281 - driven down by the speculation that the eurozone may not survive the ongoing crisis.

Duncan Higgins, senior analyst at foreign exchange broker Caxton FX, predicted today that the euro could fall further

The bailout agreement has failed to offer the euro any meaningful support. If the headlines continue to focus in on the threat of the crisis spreading, a dip below $1.30 before year end cannot be ruled out.

The euro also lost value against the pound, to 84.5p.

12.20pm: The issue of Britain's decision to lend an estimated £10bn to Ireland was raised at prime minister's question. David Cameron reminded MPs of the close trade links between the two countries:

Every man, woman and child in Ireland spends more than £3,000 a year on British goods and services

My colleague Andrew Sparrow covered all the action from PMQ's here.

12.45pm: With just over an hour to wait until Ireland's €15bn fiscal plan is released, here's a round-up of the events so far:

• Prime minister Brian Cowen has confirmed that Ireland is negotiating a €85bn bailout package (see 9.01am and 11.06am)

• Today's fiscal plan is expected to include spending cuts of €10bn, which may see unemployment benefit reduced, and €5bn of tax rises (see 9.28am)

• Shares in Allied Irish Banks and Bank of Ireland both slumped today (see 10.50am)

• The cost of insuring Spanish, Portugese and Belgian debt from default rose this morning (see 10.15am and 10.30am)

• The euro has hit a two-month low against the dollar (see 12.15pm)

• Workers in Portugal are holding a general strike in protest at austerity cutbacks (see 11.55am)

1.31pm: The Irish police fear that the cutbacks that will be announced imminently could prompt disruption this weekend. This just in from Henry McDonald, our Ireland correspondent:

Garda sources told the Guardian today that there is concern that extremist elements will use this Saturday's mass trade union demonstration in Dublin to cause unrest on the streets. There have been small but vocal demonstrations outside Government Buildings over the last 48 hours. However Garda sources said they were concerned that the larger protest at the weekend could pose a greater security problem. The Irish Congress of Trade Unions has employed several hundred security guards to help police the protest and ensure that it is a peaceful event.

It also appears that Ireland's low rate of corporation tax is safe. Henry again:

Ireland's Minister for Enterprise, Trade and Innovation has confirmed cross-party support for the retention of Ireland's 12.5% corporate tax rate as a key element of Irish industrial policy. Batt O'Keefe was responding to a motion from Ireland's main opposition party Fine Gael, which asked the government to "confirm its commitment to the maintenance of the 12.5% rate of corporation tax as an indispensable tool for growth, job creation and economic recovery." The Republic's low corporation tax status looks secure despite the €85 billion bail out from the IMF and ECB. It will not form any part of pre-conditions the IMF or the Europeans will impose on Ireland as a price for the international rescue package.

1.41pm: The Irish Examiner is reporting as many as 25,000 jobs in the public sector could go. There is also widespread reform expected of Ireland's PRSI, the equivalent of the National Insurance system.

And Davy, the Dublin-based stockbrokers, have estimated that the Irish government could take an 79% stake in Bank of Ireland as part of the recapitalisation plan.

1.52pm: Less than ten minutes to go until the fiscal plan is unveiled....and Irish government debt is under more pressure. The yield [or rate of return] on the 10-year bond has now hit 9.1%, implying a greater risk of default.

2.03pm: The fiscal plan has just been released. Skimming it quickly, the key developments are:

Ireland's minimum wage is being cut by one euro per hour, to €7.75 / hour. But the corporation tax rate of 12.5% has been saved.

VAT is being raised, from its 21% rate today to 22% in 2013, and 23% in 2014. That's meant to save €620m....

2.05pm: A total of 24,750 public sector jobs are being cut through the four-year plan, which will take the size of the Irish public sector back to the level of 2005.

Public sector pensions are also being cut back, to save €100m

2.10pm: On the expenditure side, the government is aiming to cut expenditure by €7bn by 2014, which will bring spending back to the level of 2007

Spending on social welfare will fall by €2.8bn by 2014, through a combination of enhanced social measures, labour activation, structural reform measures, and a fall in unemployment.

If necessary, further rate reductions. In other words - cuts in dole payment.

The plan also says that the public sector pay bill will fall by €1.2bn between 2010 and 2014.

The government is planning to reform the pension scheme offered to new workers - and it is also planning to cut their pay by 10%.

2.15pm: Brian Cowen is talking about the plan now, and repeatedly says that today's measures are all about maintaining "confidence". It sounds like he is trying to rally the Irish population:

It's about growing the economy We are a small, resilient, proud people.

John Gormley, the leader of the Green Party - Cowen's coalition partners - says that he will back the package. It includes various environmental measures, as well as efforts to reform the energy and ultilities markets.

Brian Lenihan, the finance minister, is now explaining that Ireland's future must be based on becoming an export-led recovery (that sounds rather familiar....)

2.20pm: Cowen and Lenihan are also insisting that this is "their plan" not the IMF's.

Henry McDonald notes that it is interesting to see John Gormley to the right of Brian Cowen in Government Buildings at this crucial press conference. Especially given that it was the Green Party leader who effectively pulled the plug on the government's life support machine this week.

Despite Fianna Fail anger at the Greens Gormley takes to the podium today to stand shoulder to shoulder with Cowen and Finance Minister Brian Lenihan.

2.21pm: Although we know that the fiscal plan will save €15bn over the next four years, we don't know all the details of how taxes will rise. That information will be released in next month's budget.

We do know that two-thirds will come from spending cuts, and a third from tax rises. The €10bn of spending cuts includes €3bn of capital revenue cuts.

Lisa O'Carroll is in the press conference and speed-reading the report. She says that is also outlines potential reform to childrens allowance, and a rise in the state pension age to 66 in 2014, 67 in 2021 and 68 in 2028.

2.28pm: Many more Irish workers will pay income tax by 2014, under today's plan. The threshold for income tax will fall to €15,300 a year, from its current level of €18,300.

At present, around 45% of earners to not pay income tax -- and economists suggest these changes will trim that to around 35%, and raise €1.9bn.

Here's how the report explains it:

The measures contained in the plan will broaden the tax base by bringing in more taxpayers into the tax net. These changes will bring us back to an income tax structure last seen in 2006

2.35pm: As expected, Ireland will bring in a new property tax, called a site value tax. It is expected to cost homeowners up to €200 by 2014.

We're also seeing that student fees will go up -- no details on that yet, I'm afraid [a timely move, with UK students marching in London today]

2.37pm: Cowen has explained that negotiations with the IMF are based on the assumption that €6bn of the €15bn cutbacks will be implemented in 2011.

That means that 40% of the total programme is 'front-loaded'.

The aim is to slash Ireland's deficit to 3% of its GDP. The report predicts that the deficit for 2010 will hit 11.7% of GDP, slightly over the target of 11.6%. It is forecast to drop to 9.1% in 2011, 7% in 2012, 5.5% in 2013 and 2.8% in 2014.

The plan admits that domestic demand will be hurt by the austerity drive. Lenihan, though, insits there is no alternative:

The reality for this country is that it has to control a spiralling deficit, and then reduce it

2.47pm: The press conference is continuing, and Cowen has just reiterated that social security payments could be cut further, on top of the €2.8bn savings promised today.

Lenihan has also paid tribute to George Osborne, the UK chancellor, for the support he has given in recent days. The Irish finance minister talked about "a new maturity" in relations between Britain and the Republic.

2.50pm: The immediate verdict from the financial markets to Ireland's fiscal plan is not encouraging.

The yield on the Irish 10-year bond has been rising since 2pm, and just touched 9.2%.

City analysts are warning that that political instability in Ireland is still undermining confidence. Here's some early reaction (via Reuters):

Melanie Bowler of Moody's Analytics: "Despite the plan, the political uncertainty remains a key trouble in the eyes of the market and needs to be resolved quickly to get things settled. But I think the plan will be pushed through."

Jim Power, chief economist of Friends First: "The big challenge is to try and deliver it, it's going to be difficult, it's going to be painful but there's no choice.....I think it's going to be very dangerous to take 15 billion out of an economy in a deep recession."

James Nixon, chief European economist at Societe Generale: "It's a staggeringly austere budget, the cuts are deep and it will hurt.......The main thing that stands out is that they still expect the economy to grow by 2.7% over the next 4 years but it's hard to see how

that can be true."

3.00pm: The fiscal plan has just been savaged by Jack O'Connor, president of the Irish Congress of Trade Unions:

Despite the collapse, those who brought it about have no intention of going away. Quite the contrary, they are busily exploiting this devastating catastrophe to re-engineer our economy and society according to an even crueler blue print which more effectively reflects their interests. The agenda is manifestly evident in the calls for the reduction of the minimum wage, the dismantlement of public services and the sell-off of state assets at bargain basement

prices.

3.34pm: I've pulled together a summary of the key points from the four-year fiscal plan.

Spending cuts - €10bn total savings by 2014

The plan aims to cut current spending by €7bn:

• The public sector wage bill will fall by €1.2bn, with 24,500 jobs being cut. New hires will face a 10% pay cut and a "reformed" pension scheme

• The social welfare bill will be cut by €2.8bn. Many welfare payments will fall, with child benefit being lowered by 10%. The age at which citizens quality for the state pension will rise, first to 66 in 2014, then 67 in 2021 and finally 68 in 2028.

• PM Cowen also indicated that the dole could be trimmed further if the government is struggling to get the numbers to add up

• The minimum wage is being cut by €1 per hour, to €7.65 per hour - a move that is meant to help get people into work

• A further €3bn will be cut across healthcare, education, agriculture, other government operation

• The plan also involves €3bn of cuts in capital expenditure.

Tax rises - €5bn total revenue by 2014

Among other measures...

• Sales tax will rise sharply, with VAT going up by 1% to 22% in 2013, rising to 23% in 2014. That should raise €570m

• Income tax thresholds are being lowered, to bring in an extra €1.9bn. This means that by 2014, income tax will be paid by people earning at least €15,300 a year instead of €18,300 at present

• A new property tax is being brought in, to raise €530m.

• Various pension adjustments are expected to bring in €865m

The economics

The plan predicts a very small rise in GDP this year, then growth of 2.75% annually between 2011 and 2014

From a deficit of 11.7% of GDP this year, Ireland's deficit is expected to fall to 9.1% in 2011, 7% in 2012, 5.5% in 2013 and 2.8% in 2014.

3.52pm: Lisa O'Carroll watched Brian Cowen unveil the fiscal plan to the Irish people and the world's media in Dublin. Here's her early take:

The Taoiseach delivered what was widely considered by the media gathered at the press conference to be a strong "state of the nation" style speech at the unveiling of the four-year plan. But the feeling was it was all too little, too late. Brian Cowen has been repeatedly been criticised for not addressing the nation during the last two years with a TV address. This afternoon's performance seems to be the closest voters will get to seeing the leadership qualities that those close to him insist he possesses. Cowen implored the nation to work together to get through the pain ahead, as he addressed "The People": "We can and we will pull through this as we have in the past," he said. "We are a smart, resilient, proud people and we are going to come through this challenge because we love our country" he said, adding we wanted to make sure that conditions were not so hard for future generations. But today's four-year plan is only the start of the unpleasant journey ahead for the young and middle income earners who seem to be worst hit.

3.58pm: Britain has apparently pledged to support Ireland's decision to maintain corporation tax at 12.5% -- in the face of pressure from other European countries who believe the rate is unfairly low. This follows the meeting at Stormont between UK City minister Mark Hoban and Northern Ireland ministers (see 11.34am)

Henry McDonald has more:

Northern nationalist party the SDLP is claiming that UK ministers have given her assurance that Britain will back Ireland's defence of its local corportation tax. SDLP leader Margaret Ritchie was speaking following a briefing by Secretary of State Owen Paterson and Financial Secretary to the Treasury Mark Hoban on British participation in EU support measures for the Irish government. The South Down MP said: "The first point we dealt with is that the British loans to the Irish government will have no impact whatsoever on spending in the north. Otherwise the discussion ranged across all the wide-ranging financial issues which affect everyone on these island. "The UK government is acting because Ireland is such an important trading partner. We sought a guarantee that in any discussions within the EU and IMF, the UK government would support the Irish position on maintaining a low rate of corporation tax and were given very firm assurances."

4.18pm: Here's some footage of finance minister Brian Lenihan announcing the fiscal plan this afternoon.

4.45pm: Sinn Féin TD Caoimhghín Ó Caoláin has said it is deeply unfair that so much of the €15bn cutbacks will fall on the lowest paid and those out of work. He called the programme a "plan for national poverty":

This is a savage plan which will force the mass of the people - but especially the low paid and those on social welfare - to pay dearly for the economic treason committed by the Fianna Fáil-Green Government.

But an Irish economist who is seen as one of the architects of Ireland's economic recovery in the 1990s told the Guardian today that there is no choice but to cut welfare payments.

Dr Sean Barrett, a senior lecturer at Trinity College Dublin said:

Irish welfare exceeds UK payments by as much as double. Irish public pay at the top level, such as government ministers, exceeds the equivalent pay in the countries whom we are now asking to rescue us!

One of the key advisers to Charles Haughey in the late 1980s, Dr Barrett told my colleage Henry McDonald that Ireland's biggest error was entering the euro. But there were plenty of other mistakes, according to Dr Barrett:



Ireland just broke so many common-sense rules by running a construction sector whose contribution to GNP was several times that of other OECD countries, trying to build a science and technology sector on an education system in which 80% of teachers of mathematics at second level have no qualification in the subject; running a banking system and a large public capital investment programme without any project appraisal system in either the public or private sectors; an agriculture based on subsidy hunting in Brussels rather than in market-based activity and running large public spending programmes without sufficient economics expertise in a large number of government departments and quangos.

There's more...

Ireland ran a political system based on clientalism, doing favours for political and economic insiders, indefinite postponing of awkward by-elections, and re-running referendums when the EU told us we got the "wrong" result the first time. Ireland joined the euro without any debate on the consequences of ignoring our patterns of trade and the loss of a vital element of economic sovereignty. The bailout money must not become yet another round of euro funding of wasteful public spending but the start of genuine reform across Irish public life, public service and regulation.

4.56pm: Standard & Poor's has dealt an early blow to the fiscal plan, claiming that the Irish government is simply being too optimistic about future economic growth.

Just hours after hitting Ireland with a two-notch downgrade (see 9.14am), S&P put the boot into the Republic again by criticising the prediction that GDP will increase by 2.75% per year between 2011 and 2014. It expects that GDP growth will actually be "close to flat" over the next two years.

"That is a meaningful difference," said S&P's Frank Gill.

If the Irish economy does struggle to match the predictions in today's plan, then many of the taxation and spending predictions within it would be thrown out of kilter.

5.20pm: This is interesting -- the opposition Fine Gael party has just revealed that it will release its own four-year fiscal plan next week.

Michael Noonan, who is likely to become Ireland's next finance minister if Fine Gael triumph, also said that he has been told by European officials that today's package can be "renegotiationed" in the future:

"I'm please that the Commission has agreed that any and all of this document can be renegotiated," Noonan said, according to Reuters in Dublin

Elsewhere, Grant Thornton tax partner Peter Vale has said that Cowen's plan is "very painful", but believes there are also positive aspects:

I think the fact that the corporation tax of 12.5% being retained is good, but I'm disappointed this doesn't come with more inducements for multi-nationals to set up, such as personal tax relief or improvements in the R&D tax regime. I would have like to have seen a stronger signal send out that we really are open for business and we want people to move their business here.

The report has one jaw-dropping statistic - 45% of workers don't pay income tax today. This according to Vale, is why the government has to extend the tax base to include those on minimum wage.

Also...the Irish Business and Employers Confederation has welcomed the fact that "most of the adjustment will be achieved by reducing expenditure, rather than increasing tax, as this is less damaging to growth".

5.28pm: Lisa O'Connell has gathered more reaction to the fiscal plan from Ireland:

Jack O'Connor, head of one of Ireland's biggest unions, Siptu, has branded it "a road map to the stone age and a declaration of war on low income workers" (see 3.00pm for more comment from O'Connor)

Labour party spokeswoman on finance Joan Burton said the plan lacked detail on a growth strategy:

The flaw in the plan is the level of deflation it's going to cause in the economy without providing any compensation in employment or growth.

Burton also raised concerns about the interest to be charged on the €85bn bail out - economists fear it could be a punitive rate between 6% and 7%.

This [government's] programme was already deflating the economy, the bank crisis has turned into a nightmare and the ECB are going to have to stand back a little bit. Ireland is willing to meet its commitment, but it can't take on levels of debt that aren't achievable and therefore it's important to know what the interest rate is and is this the negotiating document.

Also being abolished are property based tax reliefs. These fuelled the creation of thousands of "ghost estates" around the country by giving investors 10 year incentives to build in poorer areas such as Leitrim and Longford.

These are to be phased out immediately which could bring an estimated €380m into the Irish coffers every year.

5.45pm: University of Limerick economist Stephen Kinsella says the underlying assumption about the private sector investment is flawed. The report is counting on what, he believes, is a nigh-on impossible 11.25% jump between 2011 and 2012. All other years to 2014 remain flat on investment. Is there something the government isn't telling us?

He will be giving his full analysis in the Ireland business blog tomorrow.

5.57pm: OK folks, I'm going to wind this up for today. Many thanks for reading, especially if you also posted a comment. My colleagues will be publishing much more in the fiscal plan, and the wider eurozone crisis, tonight, so keep watching.