Lenihan: We had to tackle wage rates

Finance Minister Brian Lenihan said today that there was a perception in Europe that if we did not tackle wage rates here we were "freeloading on the euro".

Brian Lenihan also says economic recovery here is well underway and that recent hikes in dole queues are not a setback.

Addressing the Finance and Public Service Committee, Brian Lenihan says in terms of eurozone inflation rates, public service pay here was 'the most' out of line.

The Minister said that private sector pay was out of line also, but not to the same extent.

He also said that it was an issue that his colleagues in Brussels raised with him.

Mr Lenihan assured the committee that economic recovery here should gather momentum in the coming months.

He says recent unemployment rises are not a setback, but purely down to seasonal factors.

However, he warned that further 'firm' action to restore the public finances to order is necessary and will happen in the next Budget.