**The Irish government has unveiled one of the most severe budgets in the Republic’s history.**Finance Minister Brian Lenihan announced pay cuts for public sector workers, as part of efforts to achieve savings of 4bn euros ($5.9bn; £3.6bn).
Taoiseach Brian Cowan will have his pay reduced by 20%. “Those at the top will lead by example,” Mr Lenihan said.
The Irish economy will shrink by 1.25% in 2010, he forecast. He had previously estimated a contraction of 1.5%.
The economy is expected to shrink by 7.5% this year, confirming a previous reading.
“Our economy is still in a weakened condition, and our self confidence as a nation has been shaken,” Mr Lenihan said.
“The government’s strategy over the last 18 months is working and we can now see the first signs of a recovery here at home and in our main international markets.”