MINISTER FOR Public Expenditure and Reform Brendan Howlin appeared to rule out further public sector pay cuts yesterday.
He said that in order to secure “the very ground-breaking reforms in the public service”, which he was charged with, the Government needed the support of those who worked there.
Speaking to journalists in Dublin, the Minister responded to the call for a cut in public sector pay by Jürgen Stark, the top German official in the ECB, in an interview in yesterday’s Irish Times.
Mr Howlin said huge flexibilities had been introduced in the public service and more would be required when the comprehensive review of expenditure was laid out in the coming months.
“We need industrial peace,” he added. “We have had that at a time of great flux, and I think that it is a bargain we have struck with the social partners that has paid dividends for us in bringing about the reforms we want and even more elaborate reforms that are to come.”
Mr Howlin said Mr Stark was entitled to his opinion, adding that the Government had an agreement with the troika. “It is a tough, difficult agreement for this country to implement,” he added.
“We have implemented it to the letter. The most recent evaluation and analysis has shown that.”
It was a two-sided agreement, said Mr Howlin. “If we live up to our requirements, then the people who are funding us have to live up to theirs,” he added.
Asked if he believed that €3.6 billion in cuts would be adequate for next year, the Minister said it was part of the process in which Government was engaged.
“In the evaluation we made in June, we determined that the order of €3.6 billion would get us to a deficit target of 8.6 per cent next year,” he added.
“But, obviously, we are going to make the final decision closer to the budget.”
Mr Howlin said no final decision had been made because there were external factors impacting on the economy all the time. The Government was on a trajectory to get a deficit of 3 per cent by 2015.
“The paths are laid out to achieve that and next year’s target is a deficit of 8.6 per cent,” he added.
“We will take the fiscal and the tax measures required to achieve that next year.”
Meanwhile, the Minister for Social Protection Joan Burton, when asked about Mr Stark’s view that the Government should adopt a tougher deficit-cutting target in the budget, said: “The issue there is the balance between actually having cuts but also providing a platform for the economy to grow.
“My view, and it is a particular economic view, is that we need to have as much growth as possible, while trimming, and meeting the IMF deadlines.
“If we can actually get growth into the economy and growth in employment, that of itself will massively reduce the debt burden.”
