Coalition chaos over new bailout, wage cuts

Dublin officials have been issuing contradictory statements over how they might fund the operations of the 26-County state next year, while threatening the wages of the state’s lowest paid workers.

Fine Gael’s Minister for Transport Leo Varadkar said on Sunday that his government would have to seek a further bailout loan for next year’s spending, on top of the existing 85 billion euro facility from the International Fund, the EU and the European Central Bank.

Minister Varadkar told the Sunday Times it was unlikely that the 26-County state would be able to raise money from the international bond markets next year as originally planned.

However, a government spokesman this [Monday] morning insisted Mr Varadkar had been speaking about a “hypothetical” situation, and said the government still believed it might be possible to find buyers for next year’s bond issue.

Tanaiste and Minister for Foreign Affairs, Labour’s Eamon Gilmore declaration there was no need for public concern, and that negotiations on the bailout loans were ongoing.

“It was never going to be the case that the renegotiation of the agreement was something that was going to be done in one great big bang,” he said. “It was always going to be something that was done incrementally.”

Fine Gael Finance Minister Michael Noonan said he “categorically” ruled out a second bailout, and insisted the government would be able to finance its activities next year.


Meanwhile, as a means of bolstering business profitability, Fine Gael’s enterprise Minister Richard Bruton has devised a plan to cut wages for those who work in service areas like hotels, catering, hairdressing and security.

Labour backbenchers have expressed concern at the plans, which would directly affect over 200,000 of Ireland’s lowest-paid workers by reducing their overtime and Sunday premiums.

Taoiseach and Fine Gael leader Enda Kenny described the move as the “personal agenda” of Mr Bruton, before admitting he supported it.

“People shouldn’t be reading things into it. This is not what some people want it to be,” Mr Kenny said.

“Obviously the programme for government is very clear, there has to be reforms. The conditions attached to the troika IMF deal also say there have to be reforms so this is a matter for the Cabinet to decide.”

Sinn Fein’s newly appointed Spokesperson on Workers’ Rights Senator David Cullinane attacked the plan.

“The Government need to realise that cuts in pay or social welfare are counterproductive and damaging to our economy,” he said. “Reducing the spending power of 300,000 workers will result in a drop-off of consumer spending and will further hurt service, retail and hospitality sectors.”

Mr Cullinane said the Labour Party had campaigned in the recent election on a platform of protecting low paid workers and their families.

“Joan Burton and others in government repeatedly made the point that current social welfare rates acted as a disincentive to work. Surely cutting the pay of low paid workers will act as an ever greater impediment and is not the way to bring about sustained economic recovery...

“I am especially appealing to the Labour Party to stand by their pre-election promise of protecting the most vulnerable in our society including low paid workers.”


* It also emerged last week that the government’s Health Service Executive (HSE) is no longer funding long-term nursing home care under a nursing home support scheme.

The ‘Fair Deal’ scheme draws on the value of pensioner’s homes and savings to pay for nursing home care. However, this week it was revealed that no more funds are available to pay for nursing home admissions this year.

The Dublin parliament was last week told by Sinn Fein President Gerry Adams that the computer system for processing applications for the scheme had been shut down since 16 May.

The HSE, however, has insisted that applications continued to be accepted, but final approval is subject to the funding becoming available in the future.


* About 8,000 farmers protested in Dublin last week over their treatment by international retail chains.

The farmers marched along St Stephen’s Green on to Dawson Street, led by 20 tractors. To chants of “We want fair play”, Irish Farmers Association president John Bryan called on the government to rebalance the power between producers, suppliers and retailers.

The Competition Authority raided the IFA offices two weeks ago over an investigation into allegations of milk-price fixing.

Describing the recent raid as “an outrageous attack on farmers and an attempt to criminalise them and undermine their rights”, Mr Bryan said the authority was going after the wrong target.

“Any law that protects retailers and criminalises farmers is wrong. Our competition law is flawed and the law must be changed,” he told the protesters.

“When is the last time 15 officers raided the supermarkets? Never. When did they ever seize the mobile phones of meat barons? Never. And when did they ever take computers off the retail multiples? Never,” he said.

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