Coronavirus: New government could face €11bn of austerity

Ireland’s incoming government faces having to push through almost €11 billion of spending cuts and tax increases in the coming years to rein in a yawning budget deficit resulting from coronavirus, according to the Irish Fiscal and Advisory Council.

The austerity drive could balloon to €15 billion – half the amount endured during the financial crisis years – in a worst-case scenario where the economy is stricken with more coronavirus lockdowns.

The budgetary watchdog says the State will need a credible stimulus package to rebuild the economy – possibly as much as €10 billion.

That is in addition to €14 billion in additional health spending, income supports and business loan guarantees and investments that have been unveiled by the Government in the past three months.