Ireland is facing a very difficult recession which is worse than in the rest of the world because there is domestic housing contraction taking place at the same time, Finance Minister Brian Lenihan said today in London.
Reuters reports that the Finance Minister said that Ireland was having a tougher time tackling a recession than other countries, adding that the effects of the housing crisis had fed into the banking system here.
He also said the country would have to increase taxes as the base taxes are very low. He is due to present a supplementary Budget to the Dáil on April 7.
However, the rate of corporation tax will not change, he added.
The Minister said the country's banks were not exposed to toxic paper and that it was in a strong position by virtue of being in the euro zone, with support from the European Central Bank.
But he added that the economy was feeling the effects of a weak sterling. 'The penalty of being in the euro zone is the devaluation of sterling,' he said.
He said Ireland would not need the assistance of fellow euro zone member states and would rely on its own resources to repair the economy.
Mr Lenihan added that recent violent events in Northern Ireland had not affected the economy.
He said he was confident of a Yes vote in a second Lisbon referendum and the referendum would be held in the Autumn at the latest.
