Public sector faces pay cut if savings fall short

FURTHER public service pay cuts could be demanded by the EU and IMF next year if the proposals to overhaul the sector don’t save enough money.

The Government yesterday published the memorandum outlining the terms and conditions the EU and IMF have attached to the €85 billion bailout.

The document makes clear the degree to which the two organisations will oversee economic policy during the three-year agreement. The memo states that in the third quarter of next year the Government will consider an “appropriate adjustment, including to the overall public service wage bill, to compensate for potential shortfalls in the projected savings arising from administrative efficiencies and public service numbers reductions”.