Coalition budget deal knocks €650m hole in cabinet spending plans

The agreement sealed between the cabinet and three opposition parties on Friday, winning support for the government’s austerity drive, leaves a shortfall of €650m in the budget, the NRC reports on Monday.

Sources close to the cabinet told the paper that without further cuts the budget deficit will hit 3.3% next year, which is higher than forecast and above the eurozone limit.

The opposition parties insisted on more money for education and lower tax cuts in return for their support in the upper house of parliament.

The paper says the shortfall highlights the pressure the cabinet was under to reach a deal.

The government’s macro-economic forecasting agency CPB is currently calculating the impact of what has become known as the ‘autumn agreement’ on the treasury.

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