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• Dublin to announce the details of its four-year austerity plan
• Bailout package expected to total €85bn
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].
The Greek 10-year yield, incidentally, is just over 12% today, while Germany's remains at just 2.5%.
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.
9.14am: 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.
9.01am: 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.
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.
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