year plan to reduce its deficit will be published Tuesday, ahead of any international financial aid package, the Irish Times newspaper reported Saturday. International Monetary Fund and European Commission officials are in Dublin to discuss a bailout to help Ireland cope with its struggling banks after concerns about bank liabilities and plans to restructure eurozone debt sent borrowing costs rocketing. Last month, Ireland doubled to €15 billion ($21 billion) the amount of money it reckoned was needed to bring its deficit under control by 2014, a move the finance minister said was to ensure the country would not need a bailout. But that failed to calm jittery markets. Ireland's central bank chief acknowledged this week the country needed a loan running into tens of billions of euros to shore up a banking sector that has grown dependent on ECB funds and seen an exodus of deposits over the past six months. The Irish Times said the government – deeply unpopular and hanging on to a tiny parliamentary majority – had pushed forward the publication date for its four-year fiscal plan so it could be identified as a government-originated proposition rather than one driven by Europe or the IMF. The newspaper said the plan would be published on Tuesday, citing unnamed senior Irish officials. A government spokesman told Reuters on Saturday that the plan would be published early next week but did not specify a date. An international aid package is expected to be announced shortly afterwards. “The cabinet will meet tomorrow to sign off on the 160-page document which charts how the state will reduce its outgoings,” the Irish Times said, adding a separate plan for restructuring the bank sector was also likely to be finalized this weekend. Systemic risk The top concern for EU policymakers is that Ireland's problems will spread to other high-debt euro zone members such as Spain and Portugal, threatening a systemic crisis. Markets calmed in recent days after it became clear Ireland was on track to receive aid, but remained jittery on Friday. The euro briefly pushed up above $1.3720, only to fall back to $1.3660 in late European trading. The spreads of Irish 10-year bonds above German benchmarks drifted down towards 5.4 percentage points before pushing back up to 5.6 points, dragging Greek, Portuguese and Spanish debt alongside. Ireland's low 12.5 percent corporation tax is shaping up as a major bone of contention. Euro zone neighbours want Ireland to raise it as part of any deal, while Dublin argues the low rate is crucial for foreign investment. Finnish Finance Minister Jyrki Katainen said Dublin should be prepared to raise its taxes in return for a deal.
