STOCK MARKET WATCH -- Wednesday, 1 May 2013

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15. Report says austerity could end in 2016{ireland}

http://www.irishtimes.com/business/economy/report-says-austerity-could-end-in-2016-1.1378798

Ireland faces at least two more years of tax increases and spending cuts before an easing of austerity in 2016, according to Government spending projections published yesterday.

However, according to the first formal projections for Government spending and tax revenues beyond 2015, a neutral budget in 2016 depends on recovery in the Irish and international economies, the successful implementation of austerity budgets every year up to 2015, and no large additional banking costs, according to yesterday’s Department of Finance report.

Also yesterday, the governor of the Central Bank, Prof Patrick Honohan, said he believed the banks would need further capitalisation before 2019, when new global rules on capital requirements for banks will come into effect. He did not give a figure for how much more capital he believed they would need.

If the budget in 2016 does not contain new taxes and spending cuts, it will be the first non-austerity budget since 2008. Under the Constitution, a general election must be held no later than the spring of 2016. It has been the long-held objective of the Coalition to have completed the budget adjustments before the next election.