Ireland's Austerity Tests Public Patience

Ireland's economy has started to recover from the E.U.'s sovereign debt crisis, but a combination of public spending cuts and tax hikes could test the public's support. Another dose of 3.5 billion euros of austerity will be implemented this week, which investors hope will be softened by improved service sector and employment data.

The agreement is required under the terms of the country's 85 billion euro bailout from the ECB and IMF, which calls for about 1 billion euros in new taxes, 500 million euros in budget cuts, and 1.7 billion euros in departmental expenditure cuts. These plans have impressed investors so far, although problems remain with the country's troubled property market.