Trade union leaders have ruled out pay freezes as part of a new social partnership agreement and have also signalled that any government cutback in areas such as health and education could be deal breakers.
Meanwhile employers group Ibec has said that it is possible it could walk away from the current process if an acceptable agreement could not be found, although it would prefer not to do this.
Entering Government Buildings at the resumption of talks on a new national pay deal, John Douglas from the retail and bar workers union Mandate said that low and middle income families were feeling the pinch. He said the price freezes would not be a runner.
He also warned the Government against introducing cutbacks in areas such as health and education to deal with the deteriorating economy.
"Cutbacks in health and education will be deal breaks when it comes to the crunch," he said.
Larry Broderick of the finance union Iboa said that the concept of social partnership was that the perspective of employees would be taken on board. "We are hearing nothing but pre-emptive strikes by employers and the government about what the solutions to the problems of the economy are."
He said there would be "no national pay agreement if it involved pay cuts.
Ibec director general Turlough O'Sullivan said that everyone knew the economy was facing a serious downturn. "We have to cut our cloth according to our measure, " Mr O'Sullivan said.
He added that while unions might say one thing in public, in private they knew the reality of the situation.
He said that Ibec was completely committed to social partnership as it was the best way to do business however he said that at the end of the day the process good and all as it was had to deliver solutions for which were good for Ireland and for jobs
"If it does not deliver those kind of solutions then we will have to find a model that does."
The talks today in Government Buildings are dealing with employment rights issues and the question of pay will be addressed on Wednesday.