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Cowen puts final touches to recovery plan

TAOISEACH Brian Cowen will today finalise his plan to help the economy to recover through a series of spending cuts and business incentives.

The Government is also poised to implement a range of severe cutbacks across the public service in the coming months following the dramatic collapse in tax revenues.

The Cabinet will meet this afternoon at Farmleigh House, where ministers will be briefed on the details of Mr Cowen's plan.

The deterioration in the Exchequer finances means the figures contained in the Budget less than two months ago are out of date.

Admits

Finance Minister Brian Lenihan now admits there will be a decrease in national output of between 3-4pc next year -- as opposed to -1pc on Budget Day.

The speed of the downturn means the Government is preparing a range of spending cuts in the New Year.

Health Minister Mary Harney confirmed last night that the group set up to find areas to cut spending, the so-called An Bord Snip Nua, will be reporting back early next year.

"I think you can take it that the group that has been established by the Minister for Finance is going to report to him within the next two months and will be coming forward with fairly radical suggestions that the Government are up for," she said on RTE's 'The Week In Politics' yesterday.

Fine Gael finance spokesman Richard Bruton blamed the Government for the public finances going into freefall.

"They allowed the public finances get out of order, they allowed competitiveness be eroded and as a result the success we once had was destroyed," he said.

Mr Cowen's plans will also include tax incentives for foreign companies to set up research and development units.

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The National Development Plan will be tweaked to prioritise school building, housing insulation and energy infrastructure.

The labour intensive nature of these projects will be allied to a new apprenticeship scheme for unemployed workers.

The plan will pave the way for a substantial reduction in the number of public sector workers.

Wage rises due to be paid to public sector workers are also in the firing line and are highly unlikely to be paid.


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