Govt denies bailout will force tougher cuts

The Government tonight denied that a bailout for the crippled economy will see it forced into imposing even tougher cuts in public spending.

Taoiseach Brian Cowen said his officials were discussing “access to money” with the International Monetary Fund (IMF) and European officials in Dublin.

He sought to play down the implications of the talks and said they would not influence the final shape of a drastic €15bn savings plan his government is expected to finalise tomorrow.

Mr Cowen was on the campaign trail in Co Donegal where polls suggest a byelection threatens to weaken his government’s grip on power, but he again said his administration was working in the best interests of the country.

“What we are seeking to achieve is, if we get the right terms and conditions, access to money at a cheaper rate than is available on the markets, and that’s in the taxpayers’ interests, that’s in the country’s interests,” he said.

“And it’s because we are trying to protect the tax payers’ interests that we are in these discussions and having to work through these issues.”

But opposition politicians have accused the government of bringing shame on the state and are demanding Mr Cowen’s resignation after the symbolic blow of the IMF arriving in Dublin.

Meanwhile, the Government is poised to unveil its four-year recovery plan, amid speculation it will be published on Tuesday.

Ministers are expected to meet tomorrow to agree the document.

The Taoiseach told RTÉ that the funding contained in any rescue package from the IMF and Europe would not force the Government to reshape its planned cuts.

The Government also repeated its belief that its low corporation tax rate of 12.5% would not be affected by any bailout.

The fate of the economy has major international implications, with fears any deterioration may affect other eurozone states.

But as diplomacy over the issue continued, trade unionists raised the political temperature by threatening a campaign to force a general election.

The Technical, Engineering and Electrical Union (TEEU) met in Galway for its biennial conference where the agenda was topped by a debate on the feared impact of the multi-billion euro cuts in public spending.

Members passed an emergency motion accusing the government of negligence in its handling of the economy, and added: “If the government persists in clinging to power we call on the ICTU (Irish Congress of Trade Unions) and other civil society organisations to launch a campaign of civil disobedience to force an election on a regime that has no principles and no objective beyond staying in office for as long as possible, even at the price of destroying what is left of our economy and our society.”

TEEU general secretary Eamon Devoy said the forthcoming spending cuts would hit the most vulnerable sections of society.

“What we are witnessing is a dismantling of social welfare provision and pensions for older people and the unemployed, health services for the sick and open access to higher education for our young, while creating immunity from pain for the builders, property speculators and hierarchy of the banking system who are entirely responsible for the mess we find ourselves in,” he said.

“Over 440,000 are now unemployed and another 45,000, many of them highly skilled, forced to emigrate.”

He accused the Government of “floundering blindly through this crisis and dragging us all towards the precipice with it”.