Raising taxes is “self-defeating” when a country tries to bring down the ratio between its public debt and economic output, according to a research paper published by the European Central Bank (ECB) yesterday and based on the eurozone’s recent history.

Clashes briefly broke out between riot police and youths in central Athens during the first general strike since the country’s left-led government initially came to power in January.

Fianna Fáil has dismissed Finance Minister Michael Noonan being held up as an “economic messiah” as the opposition party launched alternative budget proposals which it claims are fairer for Irish people.

Finance Minister Michael Noonan has revealed that the Coalition may hike taxes in next month’s budget to help increase Government spending.