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Irish Coalition Falls; Election Set for Feb. 17

January 21, 1987|From Times Wire Services

DUBLIN, Ireland — Prime Minister Garret FitzGerald's coalition government collapsed Tuesday in a controversy over Ireland's economic crisis. FitzGerald immediately called elections for Feb. 17, nine months ahead of schedule.

The end of the four-year-old government came when the Labor Party, junior partner in the two-party coalition led by FitzGerald's Fine Gael, walked out to protest plans to cut about $450 million in social welfare benefits from a proposed austerity budget.

The crisis had been building for months as Ireland sank deeper into debt. Unemployment soared to a record 18% and interest rates rose to nearly 14%, highest in the Western industrial world.

Labor Party leaders used the budget crisis to take their four ministers out of the 15-member Cabinet. FitzGerald then announced the Feb. 17 election date.

Labor leader Dick Spring, deputy prime minister, said the proposed budget cuts were unjust because they "fail to spread the burden of our financial problems."

Finance Minister John Bruton then unveiled the $12.68-billion budget he had planned to put before Parliament.

It would impose new taxes on gasoline and cigarettes, close several tax loopholes and offer no income-tax relief to citizens who already pay up to 60% on annual salaries of $22,500 or more.

Bruton and FitzGerald blamed the national debt of $33 billion and unemployment on previous free-spending government policies.

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