A metaphor for Ireland's financial humiliation would be harder to find than the hearing held Tuesday morning in the airy boardroom of a downtown Boston law firm, Reuters reported. On the same day that Dublin's government was unveiling a deeply unpopular austerity budget in the wake of the country's banking crisis, former chief executive of Anglo Irish Bank David Drumm was forced to testify under oath for the first time about his holdings as part of a complex bankruptcy process that puts at risk his remaining properties, vehicles and even his ability to buy gifts for his children.

Ireland took the first crucial step Tuesday on an expected four-year road to financial recovery by securing support for a budget that will make €6 billion ($7.99 billion) in cuts across all sectors of society, from the most vulnerable welfare recipients to the country's political elite, The Wall Street Journal reported. Despite pressure from some quarters of the international community, Minister for Finance Brian Lenihan pledged to maintain Ireland's corporate tax rate, one of the lowest in Europe.

Ireland's cash-strapped government wants some of the country's workers to do something they haven't for years: pay income taxes, The Wall Street Journal reported. Roughly half of Ireland's 2.2 million workers don't pay any tax on personal income, a policy likely to disappear over the next few years if Ireland's new budget is approved Tuesday as is widely expected. European officials have said passing the new austerity budget for 2011 is a requirement of the European Union and International Monetary Fund's €67.5 billion ($90 billion) rescue.

The pained debate over a $112 billion international rescue package for Ireland will come to a crunch on Tuesday when a politically weakened Prime Minister Brian Cowen goes to Parliament seeking approval for the harshest austerity program of any government in Europe. But beyond the financial pain, the bitterest pill for the Irish may be the dawning realization that the country’s finances could fall under a foreign yoke for the next 20 or 30 years, the International Herald Tribune reported.

Former Anglo Irish Bank Chief Executive David Drumm will have to testify about his assets and conduct running the fallen Irish financial giant, under a deal his attorneys struck in bankruptcy court in Boston on Thursday, Reuters reported. The testimony could paint a much fuller picture of the life that Drumm has been living in Massachusetts after stepping down from the helm of Anglo-Irish at the end of 2008, just before the government nationalized the bank. The collapse of the bank was among the factors leading the country to seek an emergency international aid package last month.

Former financial regulator Pat Neary has told one of the investigations into Anglo Irish Bank that it was not surprising banks would carry out transactions to put “a gloss” on their published accounts. Mr Neary also told investigators he was never shown in advance a balance sheet for Anglo for the year ending September 30th, 2008, by anyone at the bank, the Irish Times reported. The investigations are examining the €7 billion in deposits placed with the bank by Irish Life and Permanent (IL&P) over the bank’s 2008 financial year-end.

The National Asset Management Agency (Nama) has accused developers of being in “denial” about the crisis in construction and rejected criticisms that it had compounded problems in the banking and property markets by applying steep discounts to loans transferred to the agency, the Irish Times reported. The comments followed the release yesterday by the Construction Industry Federation (CIF) of a report – commissioned from Lombard Street Research – on Nama’s impact on the banking and property sectors one year on from its establishment.

European Central Bank officials tried to force Ireland to seek a bailout earlier this month and European officials are now trying to do the same to Portugal, Irish Justice Minister Dermot Ahern said. “Clearly there were people from outside this country who were trying to bounce us in as a sovereign state, into making an application, throwing in the towel before we had even considered it as a government,” he told Irish state broadcaster RTE in an interview today.

A revised restructuring plan will see Anglo Irish Bank rebranded and changed into an asset recovery bank, chairman Alan Dukes confirmed today, the Irish Times reported. Mr Dukes said the original plan to split Anglo into a funding bank and recovery agency had been shelved. A plan to wind down the bank’s loan book over “a multi-year period” would be submitted to the European Commission by the end of January, he told RTÉ’s Morning Ireland . However, Mr Dukes said that it was difficult to predict the timing for a recovery in loans.

A second bondholder group has claimed to hold a stake sufficient to block part of Anglo Irish Bank’s efforts to bolster its capital – raising the prospect of the bank’s restructuring being delayed. The bank’s battle with its bondholders is being closely watched for what it might imply for Ireland’s ability to inflict losses on junior creditors in its ailing banking sector. Anglo Irish has offered its junior, or subordinated, noteholders just 20 per cent of the face value of their holdings.