Chance of economic deal 'will emerge by weekend'

 

Taoiseach Brian Cowen said it will be known by the end of the week if there is agreement with the social partnership on a recovery plan. His comments came as optimism grew that substantive talks on measures to tackle the economic crisis could begin tomorrow.

Speaking as talks continued in Government Buildings on the plan, Mr Cowen told the Dáil the social partnership model represented the best method of ensuring the necessary adjustments fell fairly on each section of society.

He said progress was being made at the economic talks with the social partners. “We will know by the end of this week whether in fact we can come to an agreement on a framework for a pact which will bring stabilisation, which would be based on social solidarity," he said.

Mr Cowen said the scale of the challenge is such that we cannot say with any certainty that any constituency or cohort of people will stay immune from impact of the adjustment.

“We will work on the basis of trying to stabilise our public finances, provide social solidarity and use the opportunity to reform in a whole range of areas,” he added.

A deadline of January 31st was originally set for a conclusion to the talks but it is now expected that may be pushed out, with a possible announcement of an economic recovery plan on Tuesday next, February 3rd.

The Government was circulating a framework document to the social partners today setting out the key areas for negotiations as talks aimed at achieving up to €2 billion in public sector cuts continue.

It is thought that a final framework document could be finalised by tomorrow enabling substantive talks to begin in earnest.

Speaking on his way into Government Buildings this afternoon, Turlough O Sullivan, director general of employers’ group Ibec said they was very strongly committed to partnership and working within the programme.

"Unless we have something concluded by the weekend the Government will have to do what it has to do," he said. He said Ibec was in agreement with the unions that the pain of the cuts had to be shared.

"Should those who did well out of boom share the pain? The short answer is yes, he said."

"Broadening the tax base is probably acceptable. If at all we should not increase the burden on personal or corporate tax payers though, added Mr O'Sullivan.

Minister for the Environment John Gormley earlier said progress was being made in talks and there was “real engagement” between the parties. He said and the Government was keen to ensure the survival of social partnership model and was listening to the concerns of employers and unions.

Ictu general secretary David Begg today formally rejected the employers’ demand last week for a deferral of the national pay deal and an “indefinite delay” to a rise in the minimum wage. In a letter to Ibec, Mr Begg warned that the demand could make agreement on the national recovery plan more difficult.

“If Ibec proceeds to detach itself from the process in the manner suggested... then it will make it very difficult to establish any form of a Social Solidarity Pact.”

He said the deal that was concluded late last year included a strengthened and more robust “Inability to Pay” mechanism.

Government sources have said if progress is made in this week's talks on achieving a consensus by the weekend then the deadline of the end of the month could be extended.

“If it slipped for a day or two, why would it be stopped if it were possible?” said the Government spokesman. “The Taoiseach has consistently said he is looking for consensus from all the social partners. It’s a much better place to be.”

The spokesman also maintained that neither Mr Cowen nor the Government had ever set this morning as a final deadline, saying others may have reached that conclusion on the basis that the last meeting of Cabinet in January takes place today.

The position adopted by Mr Cowen won support from the Fianna Fáil parliamentary party last night, at the end of a five-hour meeting.

Government Chief Whip Pat Carey said: “The vast majority of people would be anxious that as far as possible, a decision could be made by the end of January which does not leave an awful lot of time. If we are moving towards consensus it would be foolish not to avail of the extra day or two to allow that to develop.”

The parliamentary party meeting was attended by 94 TDs and Senators. There were a total of 45 speakers.

Mr Cowen, in his opening address, said that €15 billion in savings will be needed in the economy over the next five years.“There is a recognition that we are in very difficult times,” Mr Carey said afterwards.

He said the consensus at the meeting was “that in the meantime those who can bear the burden must bear it most and those who are most vulnerable should be protected”.