FINANCE Minister Brian Lenihan is being forced to outline a €7bn-cuts-and-taxes 'Super Budget' to last the next four years to help pay for the bank bailout.
The detailed plan is designed to reassure financial markets that Ireland can reduce its spiralling debt costs, as the "final" figure for the banking losses was put at €50bn, and AIB was nationalised.
The Budget framework to be delivered next month is expected to show the areas where the Government will make cuts and savings over the coming years, and the revenues to be raised from new and existing taxes.
Even those in the Department of Finance admit the plan will be "political dynamite". It could, for example, say €500m will be saved in health or education, but it would not go into exact details of where those cuts would be made.
Taxes on water and property, increases in personal tax, and a reduction in the public sector pay bill may also be among the measures outlined in the plan.
A similar plan prepared by the Portuguese government outlined measures such as freezing pensions, cutting public sector pay, cutting health and education spending, cutting the children's allowance and increasing VAT and personal tax.
But the enforced gamble could pay off -- as Mr Lenihan will also be able to call the opposition's bluff on how they would address the fiscal crisis.
Labour and Fine Gael last night refused to say if they would lay out an alternative plan.
The bill for saving our banks is set to cost every man, woman and child in the State €10,000.
This is based on the total cost of the bailout hitting €44bn, but it could rise to €50bn.
Mr Lenihan said: "Yes, of course, these figures are horrendous, but they can be managed over a 10-year period."
The bailout will push the 2010 deficit up to an unprecedented 32pc of GDP -- over 10 times the European Union's limit -- and the national debt will be almost 100pc of GDP.
The latest revelations came on a dramatic day when:
- The Central Bank estimated the "stress case" cost of winding down Anglo Irish Bank at €34bn.
- Two of Allied Irish Banks' leading executives -- chairman Dan O'Connor and managing director Colm Doherty -- were forced out after the Government effectively took control of the group.
- The Government said it would have to inject another €2.7bn into Irish Nationwide building society, on top of €2.7bn already earmarked.
- Central Bank governor Patrick Honohan admitted that €40bn of the bailouts were "essentially lost money".
- Mr Lenihan defended his policy not to let investors who gambled on debt securities, known as senior bond holders, take a hit for Anglo going bust.
- A property developer accused of damaging the gates of Leinster House in protest at the bank bailout was in court, charged with criminal damage.
Under EU accounting rules, the full cost of the bank rescue will appear on this year's budgetary figures, setting all-time records.
The actual cash costs will be spread over several years, but markets want to see as soon as possible how the €7bn to halt the rise in the debt will be found. Mr Lenihan said he remained committed to reducing the deficit below the EU limit by 2014.
The previous cost-cutting target for Budget 2011 would have to be "upped" significantly while the four-year road-to-recovery plan for the country would be drawn up in the coming weeks, he said.
Mr Lenihan said he did not expect hospitals or schools would be shut down under the savage cuts but warned of a fundamental value-for-money overhaul of the public sector.
About half of the €7bn targeted by Mr Lenihan must be saved in this year's Budget.
Mr Lenihan yesterday refused to rule out an increase in personal taxes, after previously saying he was opposed to such hikes. Nothing could be decided until data on economic growth, the public finances and exchequer returns was assembled, he added.
Offering cold comfort to taxpayers left paying for the fallout for at least the next 10 years, he insisted the banking crisis was coming to an end.
"This particular nightmare the Government has had to live with, the Irish people have had to live with, and I have had to live with, since September 2008," he said. "We are now bringing closure to that."
The opposition dubbed the series of announcements Black Thursday. But the four-year timeline means the Government could be making commitments beyond its term in office.
Shares in AIB fell more than 30pc yesterday morning after Mr Lenihan announced plans to effectively nationalise Ireland's second biggest bank.
Existing shareholders could be left owning less than 10pc of the bank once the Government puts in another €3bn of emergency capital.
The shock announcement was triggered by revelations that AIB was facing massively higher losses on the troubled loans it was due to transfer to the National Asset Management Agency.
The euro dipped briefly against the dollar as international markets contemplated Ireland's ever growing fiscal hole, but the currency soon recovered and investors reacted calmly overall.
But the Government must stick to the 2014 deficit deadline in order to restore the country's financial credibility, EU policymakers yesterday insisted.
The Government is under increased surveillance by EU authorities for flouting the bloc's spending limits.