THE TAOISEACH moved last night to dampen speculation that next year's 3.5 per cent pay rise for more than 300,000 public servants may be deferred.
On his return from Berlin last night, Mr Cowen issued a statement to reassure trade union leaders who were concerned at comments he had made in the Dáil earlier in the day implying he had raised the issue with them. Mr Cowen accepted that a review of the national pay deal did not arise during recent meetings with the social partners.
Mr Cowen was in Berlin for discussions on the Lisbon Treaty with German chancellor Angela Merkel.
Mr Cowen said in his statement that he had met with Irish Congress of Trade Unions (Ictu) and employers' body Ibec representatives for discussions about the current economic situation. "The discussions took place against the background of the emerging exchequer and unemployment figures. The implementation of the recently ratified national pay agreement also provided the context for these discussions.
"The purpose of the meeting was to establish a basis for co-operation around the development of a strategy focused on economic recovery, and so the question of review of the national pay agreement did not arise," said Mr Cowen.
He added that in his comments in the Dáil earlier in the day he had clearly outlined that the focus was on economic recovery and this was the sole purpose of his discussions.
In the Dáil, Mr Cowen said in response to Opposition leaders that the Government would continue to examine the operation of the pay arrangements in partnership with stakeholders. He said that the Government would not throw away the partnership process.
"I recently engaged in discussions with Ibec and the Irish Congress of Trade Unions (Ictu). Collectively, we will bring forward an approach that will best guarantee our way through this problem," he said.
Ictu later denied that it had held any discussions with the Government or the Taoiseach "that in any way involved amending, deferring, altering, suspending or changing the pay and workplace rights deal recently concluded between unions, Government and employers".
Jack O'Connor, the leader of the country's largest union, Siptu, said that it would be very foolish of the Government to consider deferring the pay rise. He said his union would engage if the Government made an approach to which all could contribute, but he said there was no need to cause panic about the pay deal.
Union sources maintained that the Ictu meeting with the Taoiseach centred on moves to bring the Construction Industry Federation - which last week rejected the pay deal - back into the process.
Questioned by reporters on the pay deal on his arrival in Berlin, Mr Cowen said: "We're very clearly working in partnership, we're interested in all of these issues and we are intent on dealing with problems on that basis."
In Dublin, Green Party chairman Senator Dan Boyle called for an extended public sector pay freeze in order to protect jobs. "I think things have changed dramatically since the pay agreement in September," he said. "During the last pay agreement when inflation ran ahead of expectations, the deal was renegotiated to deliver higher pay increases. This time the position is reversed and inflation will be close to zero next year," he said. Mr Boyle emphasised that he was not calling for the deal to be discarded but renegotiated.
Minister for Finance Brian Lenihan said yesterday the Government was engaging with the social partners on the economic position facing the State. He said that the Government would "show leadership" early in the new year. On RTÉ's Morning Ireland he said: "The Government will give leadership on this early in the new year. We can't wait forever on this. Nothing can be ruled out."
Ibec director general Turlough O'Sullivan said that at an informal bilateral meeting on the economy in recent days the Taoiseach had said that the public finances were in difficulties and that the Government had to look at all options.