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Aug 11, 2014

Ireland eyes gradual reversal of crisis cuts in public sector pay: Minister

Pressure to ease austerity measures
    
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DUBLIN (Reuters) — Ireland's government will start talks next year with trade unions on the gradual reversal of public sector pay cuts that helped it overcome financial crisis, the spending minister was quoted as saying on Saturday.

Ireland's coalition government won praise in Europe for meeting all major targets under the 85 billion euro ($124 billion CAD) EU-IMF aid program it completed last year, but is under pressure at home to ease austerity measures.

Public spending minister Brendan Howlin said talks would begin next year on reversing some elements of the Financial Emergency Measures in the Public Interest Acts (FEMPI) which included a pension levy averaging 7.5 per cent and a pay cut averaging 6.5 per cent for public sector workers.

The acts were introduced between 2009 and 2013, after a property crash left the banking sector near collapse and dragged Ireland into the euro debt crisis.

"Next year, we certainly will have to engage with the unions on the orderly winding down of FEMPI and who should benefit first and how that should be done over time," Howlin was quoted as saying by the Irish Independent newspaper.

"We have to have agreement with the public sector unions that it is not going to be a big bang, because that would undo all the good work we have done over three years. There has to be an orderly wind-down, as opposed to a sudden ending," he said.

Howlin is a member of the junior coalition Labor party, which suffered a collapse in support in midterm elections in May.

New Labor party leader Joan Burton last week said the fact that the economy was growing faster than expected meant the government would be able to ease austerity measures when it sets its budget for 2015 in October.

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