“Tougher budget in prospect as economy shrinks,” headlines the Irish Times, one day after statistics revealed that Ireland’s GDP contracted 1.2 per cent in the second quarter of 2010. “Ireland and Greece were the only two economies in the 16-member eurozone bloc to shrink”, the Dublin daily notes. “This accentuates Ireland’s outlier status and could make it more vulnerable to a loss of investor confidence.” Finance minister Brian Lenihan denied that the economy is sliding into a double-dip recession and affirmed that the figures show the economy is stabilising. The government plans to go ahead with another austerity budget, and to cut the deficit by a further €3 billion in 2011.