TAOISEACH BRIAN Cowen stressed yesterday that neither he nor his officials made any reference to the possibility of the International Monetary Fund (IMF) being called into Ireland during a Government briefing with trade unions.
The Taoiseach’s version of events was supported by the trade union official who was at the briefing and subsequently expressed concern to colleagues about possible IMF intervention.
Mr Cowen, who is on an official visit to Japan, was incorrectly reported in some media yesterday as saying the Government told unions at the meeting last Friday that it would need to call in the IMF if spending was not curtailed.
The value of the euro dropped more than a cent against the dollar early yesterday but recovered after the Government moved to clarify its position. “I have never said that,” said Mr Cowen later yesterday. “We are a member of the euro area and we have the best-performing economy in the last 10 years in the European Union.”
The earlier media reports were based on Mr Cowen’s response to a question about a letter written by Dan Murphy, general secretary of the Public Service Executive Union.
In the letter to colleagues after Friday’s briefing, Mr Murphy warned that the public finances were unsustainable and, if not curtailed, could lead to a possible IMF intervention that would result in the mass dismissal of public sector workers.
At an event in Tokyo announcing new trade links between Japan and Ireland, Mr Cowen was asked about the letter.
Mr Cowen said Mr Murphy’s views were based on the evidence that was provided by the Government during its discussions with the trade union movement. He also said Mr Murphy’s comment served to remind all involved that it was time to “get real” about the economic situation.
However, Mr Cowen made no specific reference to the IMF when talking to reporters. He stated: “I think what is simply being articulated on the basis of the briefings which have been provided is that the sharpness of the downturn is such that all of us need to get real about how we can move forward from here together in meeting this challenge.”
Government sources said that, at the briefing on Friday, the Government side did spell out to the unions the economic realities in unvarnished and stark terms. However, the sources were insistent that neither the Taoiseach nor any of his officials had mentioned the IMF at any stage.
Mr Murphy also backed up the Taoiseach’s version of events yesterday, telling RTÉ Radio’s News at One: “The Government made no reference whatsoever to the IMF, it was simply that I concluded myself. . . that a possibility, albeit a remote one, was that, if no action was taken, that type of situation could arise.”
Mr Murphy said he drew this conclusion “from looking at the figures and trying to convey the seriousness of the situation to my own members”.
“At no stage did the Government make any reference to the IMF. I want to make that absolutely clear,” said Mr Murphy.
The Department of Finance also moved quickly to correct the reference to the IMF in reports yesterday, with a statement that pointed out that Ireland’s debt position of 20 per cent of GDP at the end of 2008 is relatively low by international standards.
“Those briefings, which made no reference to the IMF, set out what the fiscal position will be if no corrective action is taken,” said the statement. “In those briefings, the Taoiseach stated clearly that the Government is determined to take the necessary action so as to ensure the stability and sustainability of the Irish public finances,” it added.
What Cowen said
"Dan Murphy is a very experienced trade unionist and one that has been involved with social partnership since its inception.
"I think what is simply being articulated on the basis of the briefings which have been provided is that the sharpness of the downturn is such that all of us need to get real about how we can move forward from here together in meeting this challenge.
"I think [Mr Murphy] was referring to the previous experience in the 1980s when determined and corrective and timely action was the means by which our prosperity was retained and sustained.
"I think that the comments that [Mr Murphy] has made are based on the evidence that was provided by Government in our discussions with trade unions."
Mr Cowen was speaking at a press conference in Japan yesterday