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UPDATE 3-Ireland cuts 1 bln eur more from post-bailout needs
Thu, Aug 23 2012
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Mon Sep 10, 2012 12:18pm EDT
DUBLIN (Reuters) - A senior Irish Labor Party minister said on Monday he would back any overhaul of a key pay agreement with unions that has delivered industrial peace, but one of the country's lenders said a revision was not on the cards.
Ireland's public sector unions signed up to the "Croke Park" agreement in March 2010 under which the government pledged not to cut pay and avoid layoffs as long as unions agreed to voluntary redundancies and sweeping reforms.
But energy minister Pat Rabbitte said he would support any move to reopen the deal after calls from politicians and business groups for discussions to begin before the agreement ends in 2014.
"If the government were to decide to introduce new issues into the Croke Park discussions in the coming weeks, I would support that," Rabbitte told national broadcaster RTE.
He said he would support talks to consider new issues and "look at the overall economic situation ... and the fact that in order to be compliant with our targets, we have to bring in what will be a difficult budget in December".
Ireland's under pressure health minister became the first senior member of the government to question the viability of the deal last month when he said there may be no option but to cut pay as his department struggled to meet spending targets set under Dublin's EU/IMF bailout.
Other ministers have said talks on a successor to Croke Park, which expires in 2014, should begin now and the Irish Business and Employers Confederation (IBEC) also called for a renegotiation, saying the agreement, is "not fit for purpose" in the current economic climate.
The deal is credited with avoiding the kind of industrial action that has held back fellow bailout recipient Greece, enabling Ireland to make greater progress than any other troubled euro zone debtor in reviving its economy despite deep budget cuts.
Public sector workers took wage cuts averaging 15 percent before the agreement was struck.
In its latest quarterly review, the International Monetary Fund (IMF) said that while it recognized the benefits of the agreement, the public sector pay bill was still high, and that continued monitoring of the adequacy of savings was needed.
However the Washington-based body, one of a trio of lenders overseeing Ireland's bailout progress, said it had not been given any indication from government that a renegotiation of the current deal was in the offing.
"There are discussions about what happens when the current arrangement comes to an end in 2014, there is not discussion about revising it," IMF mission chief to Ireland Craig Beaumont said in a conference call.
"Our discussions with the government indicated quite broad support for the agreement and we emphasized therefore the need to take maximum advantage of the provisions it includes."
Ireland's prime minister added that the agreement would be honored in full and that the government simply wanted to accelerate the pace of its implementation to squeeze as much as it can from the existing deal.
(Reporting by Lorraine Turner and Padraic Halpin; Editing by Ruth Pitchford, Ron Askew)
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