Gormley: Europe sought minimum wage cut
The Green Party leader’s revelation comes ahead of the end of EU/IMF bailout talks, possibly by Sunday. It also suggests the Government did not have complete control of the measures in the four-year plan.
Mr Gormley revealed the involvement of Europe while he was attacking opposition parties for saying they would reverse the cut.
He said the cut in the minimum wage, to €7.65 an hour, was one of the stipulations of Economics Commissioner Olli Rehn.
Mr Gormley said Fine Gael’s pledge to revisit the issue was not credible as Europe would not allow it.
“Your party says now that you are going to renegotiate the minimum wage . . . and that, I am afraid, is completely nonsensical because this was the first demand of Olli Rehn and others that this had to be in the plan,” he told Fine Gael TD Phil Hogan.
However, the Department of Finance immediately denied Mr Gormley’s version of events, maintaining that the commission did not have prior sight of the plan or make demands of it.
A spokesperson for Mr Rehn said: “This is not our plan. It is the Government’s plan and it is up to the Government to put into it what they wish.”
He could not say whether reducing the minimum wage would be a condition of the EU/IMF bailout when it is agreed with the Government.
The department said international agencies would publish policy documents on various issues, but they did not have a part to play in the strategy.
“The EU/IMF/ECB saw an outline of the plan over the weekend and indicated their broad approval. The Cabinet have had long intensive meetings on the plan in recent weeks and nothing was taken out or added to the plan on the instigation of these international bodies,” a statement said.
Under earlier questioning in the Dáil, Taoiseach Brian Cowen said the ministerial order lowering the minimum wage would be introduced after the budget.
Fine Gael leader Enda Kenny headed a delegation to meet IMF officials yesterday and carried a message that it would respect the €15bn target, but it would change the policies underpinning the plan.
Eighty thousand people are currently employed on the minimum wage and Labour Party leader Eamon Gilmore said the suggested cut was illogical.
Meanwhile, senior bondholders in the banks are almost certain to be protected in the final contract between the state and the EU/IMF. Irish taxpayers will carry the whole burden.
The European Commission is preparing legislation to levy banks in future to create a fund either as an insurance against bank losses or to compensate taxpayers.
They are also preparing proposals on how bondholders will suffer losses in countries needing an EU bailout under a new fund to be established after 2013.
But German Chancellor Angela Merkel confirmed yesterday it would not apply to any country, including Ireland, availing of the current fund.
