TAOISEACH Brian Cowen faces a week of intensive activity on his return from Japan with a Dáil debate on the banking crisis and a two-day Cabinet meeting to decide how cuts in the €20 billion public sector pay bill can be achieved.
It emerged yesterday that the detailed legislation to nationalise Anglo Irish Bank will contain a significant change from the heads of the Bill published last week.
A clause, which would have prevented large depositors with €20 million or more in the bank from withdrawing funds if their debts exceeded that figure, will now be dropped.
The Bill is due to come before the Houses of the Oireachtas tomorrow, but Opposition parties are demanding more time for debate.
The State’s largest union has warned of strikes and “civil disruption” if the Government reduces public service pay.
In a letter to its members, Siptu’s three top officials, including union president Jack O’Connor, said they recognised there was a very serious problem with the public finances but warned of the likelihood of strikes and civil disruption if the Government sought to impose public service pay cuts or reductions in social benefits.
The Irish Nurses Organisation, which represents about 40,000 nurses, has said it will not participate in talks with Government if the process involves discussions on reducing pay in any form.
It said it had legal advice that the Government could not cut the pay of individual nurses or midwives.
Ministers will meet on Wednesday and Thursday to decide how cuts of more than €1 billion can be achieved in the pay bill as part of the effort to reduce public spending this year.
Submissions from unions and employers’ group Ibec will be assessed by the Cabinet, a Government spokesman said.
Contacts between officials and union leaders are expected to take place by the end of the week once the Cabinet has discussed options for dealing with the crisis.
Meanwhile, Minister for Finance Brian Lenihan has defended the decision to nationalise Anglo Irish Bank, saying there would have been “catastrophic consequences” for banking in Ireland if it had been permitted to fail.
Mr Lenihan said while the bank was continuing to make enough money from its loans to cover its liabilities, it was essential to nationalise it to ensure the stability of the banking system.
"We have no option. We have to ensure the bank does not fail," the Minister told RTÉ Radio's This Weekprogramme.
Labour leader Eamon Gilmore said although most workers understood the link between pay and the state of the economy, they would ask why they would have to take a pay cut while the people who took out the huge loans in Anglo walked away scot-free.
Mr Gilmore said the Government’s plans for Anglo Irish were more about safeguarding the bank’s interests than guarding taxpayers’ money.
“What has gone on at that bank has been absolutely scandalous. We have to get to the bottom of it, and we won’t get to the bottom of it if there is, in effect, a legislative cover-up of what took place in Anglo. We won’t co-operate with a cover-up.”
Fine Gael leader Enda Kenny accused the Government of having “consciously and deliberately” walked the country into an economic mess by the reckless spending commitments made in the last number of budgets.