Income tax cuts pledge backed

THE Government can fulfil its pledge not to raise income tax rates in the coming budget, but it will have to fill the €250 million hole in some other way, EU sources said.

But plans to leave senior bondholders in Anglo Irish Bank minus a considerable amount of their €3.8 billion investment will be resisted by Brussels, the source confirmed.

Finance Minister Michael Noonan will discuss the issues with the ECB president and Economics Commissioner Olli Rehn next week. He needs their agreement and that of the IMF to make the changes.