DUBLIN — Ireland slashed pay for state workers, cut welfare benefits and imposed new environmental taxes on fuel Wednesday as it unveiled a record euro4 billion ($6 billion) in budget cuts to combat a runaway deficit.
Finance Minister Brian Lenihan said about 400,000 state workers — a fifth of the country's work force — would suffer pay cuts ranging from 5 percent to 15 percent and Prime Minister Brian Cowen will cut his salary a full 20 percent.
The plan — Ireland's biggest budget cut in history — aims to save more than euro1 billion ($1.47 billion) in salary cuts alone next year.
"By taking the difficult but necessary measures now, we will rebuild our nation's self-confidence here at home and our reputation abroad," Lenihan said.
Lenihan said the drastic measures were needed to put a dent in a deficit projected to top euro22 billion ($32 billion) this year, to restore Ireland's lost competitiveness as a base for foreign investment in the 16-nation euro currency zone and to stop a rise in unemployment that has reached 12.5 percent.
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