EU and IMF have power of approval over Ireland's four-year plan

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The EU and IMF are entitled to seek whatever changes they see fit to yesterday's four-year austerity plan according to the Irish Times. The Department of Finance confirmed that Fianna Fail's austerity plans could be ammended by the two external bodies.

The document was drafted by the Government, but it is believed that neither the IMF or European Commission have endorsed it yet.

Despite this yesterday, Economics Commissioner Olli Rehn yesterday welcomed the plan saying it is "a sound basis for negotiations" on an emergency loan with the IMF and the EU.

The main points unveiled in yesterday's plan, as outlined by the Irish Times are as follows:

€15bn in measures aim to bring deficit under 3% GDP by 2014
€6bn of adjustments to be front-loaded in 2011
An extra €1.9bn sought via income tax changes
Standard VAT rate to rise from 21% to 23% in 2014
Entry point for income tax to fall to €15,300 – from €18,300 currently – by 2014
Minimum wage to be reduced by €1 to €7.65
Reduction of social welfare spending of €2.8bn targeted
Domestic water charges to be introduced by 2014
Introduction of a site value tax in 2012
Students' contribution charge to rise from €1,500 to €2,000
Reform of capital acquisitions, capital gains tax
Pension-related tax changes to yield €700m
Tax savings of €240m on public sector pension deductions
Site valuation tax to be introduced
Cut in public service staff by 24,750 from end-2008 levels to 2005 levels
Overall pay adjustments of €1.2bn by 2014
10% pay cut, new pension scheme for new public sector entrants