Imposing pension cuts has an advantage for the Government in
brokering a successor to the Croke Park deal as it will not be opposed by
unions, who represent serving staff.
It would also send out a strong message that well-paid retirees are
sharing the burden of the crisis in the state purse.
The junior minister also issued a warning to nurses, gardai and
other staff who are refusing to engage in the talks or have threatened to
In what may be seen as a hint that they may face government-imposed
pay cuts, he warned that they could not expect "favourable treatment" if
they do not back a deal.
"I'd say to the nurses and to everyone else, to be part and parcel
of these discussions," he said.
"You can achieve nothing on the fringes. You can achieve nothing on
the outside. We want engagement on the inside.
"And of course no one group, be they nurses, gardai or anyone else,
has the right to stand back from the process and think that they will be
treated favourably just because of their negotiating tactics."
The minister's warning comes as frontline workers are gearing up to
begin a campaign of lobbying TDs and senators over cuts to their premium pay
and allowances this weekend.
"The Government is very ambitious for a deal here," said Mr Hayes.
"You can't start picking and choosing your negotiating strategy."
He said the public sector unions who are at the table realise the
talks are about the sustainability of state employees' pay and pensions in
"If we get this agreement, it would put us in a very strong
position in terms of what we need to do in the public sector, so I'm
encouraging everyone to be part of this."
He said he agreed with Public Expenditure Minister Brendan Howlin
that this would be the "last round" of cuts that public servants would be
asked for. "I don't think the issue can be broached again," he said.
Mr Hayes was speaking at the launch of a guidebook 'Are tenders on
your radar?' to help small and medium-sized businesses win public sector
contracts at the Dublin Chamber of Commerce.
The Irish Independent also reports that Aer Lingus staff face a continued freeze on wage increments until a deal is
struck to resolve a near €800m deficit at a pension scheme that serves the
The airline's director of change and engagement, Sean Murphy, wrote to the
Irish Congress of Trade Unions (ICTU) informing it of the continuing impasse.
The differences between unions and the airline are thought to be so great
that the threat of industrial action during the spring can't be ruled out.
Aer Lingus has been engaged in a long-running effort with unions to thrash
out a solution to tackling the huge deficit at the Irish Aviation Superannuation
This scheme serves thousands of current and former employees at Aer Lingus
and the Dublin Aviation Authority (DAA).
The Labour Court will now draft its own proposals to finally resolving
They include so-called cost offsetting measures put forward by Aer Lingus,
the pension capital requirement being sought by unions, and the fact that the
airline doesn't agree with financial projections drafted by actuaries – who are
members of a technical group set up to assist in finding a resolution.
The Labour Court could deliver its proposals as soon as next week. It had
hoped to have the pension issue resolved by March.
But it's thought that no matter what suggestions it comes up, the unions and
the airline could remain so far apart as for the pension problem to be almost
Aer Lingus has demanded fresh productivity gains in return for making any
contribution to a pension scheme – a major sticking point with unions.
Under its 'Greenfield' cost-saving plan, introduced in 2009 as the airline
faced enormous financial difficulties, Aer Lingus sought to cut about €100m a
year from its cost base. It has exceeded that target.
The plan included pay freezes, which were to expire at the end of last
December. There had been an expectation among staff that pay increments would
resume in April.
But Mr Murphy told unions yesterday that Aer Lingus is seeking
"cost moderation and stabilisation" for staff members affected by the
"This is necessary to facilitate funding of the pension proposal to
the required level. Our proposal seeks to do this through the moderation of
pay increases rather than through pay reduction," he said.
Aer Lingus is proposing that for a four-year period, normal
incremental pay increases would be replaced by an annual stabilisation
payment amounting to €16m over the four years.
It has proposed two methods for calculating what staff would
receive under the planned payments.
"Aer Lingus will not make any increases to pay, including
increments, pending resolution of this issue," he added.
The Irish Times reports that the family of bankrupt businessman Seán Quinn will challenge the
constitutionality of the new IBRC Act if the courts are found to have no power
to lift the “absolute” stay in the Act halting the family’s action against the
bank, their lawyers have said.
Martin Hayden SC, for the Quinns, said yesterday his side would bring “a full
challenge” to the Act if it prevented the stay being lifted.
He suggested that the Attorney General should be put on notice of the
Mr Justice Peter Kelly will hear arguments on March 7th before deciding
whether the Act, which last week liquidated Irish Bank Resolution Corporation
(formerly Anglo), permits the courts to lift the “immediate stay” on “all”
existing proceedings against IBRC.
That stay is set out in section 6 of the Act; the judge previously noted that
the Act also disapplied provisions which normally allowed the courts to lift
The many existing proceedings against IBRC include the action by Patricia
Quinn and her children alleging that they are not liable for €2.34 billion loans
by Anglo to Quinn companies on grounds that those were made for the unlawful
purpose of propping up the bank’s plummeting share price.
There is no stay on existing – or new – proceedings “by” IBRC. Issues were
mentioned at the Commercial Court yesterday arising from its action alleging
that various Quinn family members and others conspired to put assets in the
Quinn’s international property group beyond the bank’s reach.
The full hearings of the IBRC action and the family’s action have been parked
pending criminal proceedings against former Anglo chairman Seán FitzPatrick and
two former bank executives, Pat Whelan and Willie McAteer.
However, pre-trial matters have continued, including the cross-examination of
the five Quinn children and two of their spouses – Niall McPartland and Stephen
Kelly – about whether they have fully disclosed details of their assets and
involvement with Quinn property companies.
That cross-examination has concluded and the judge yesterday fixed dates for
the exchange of legal submissions between the sides. He also fixed March 19th to
hear oral submissions as to whether the bank is entitled to fuller disclosure.
He also agreed to vary freezing orders on the Quinns accounts to allow them
to pay €6,285 fees for the transcripts of the five- day cross-examination, plus
another €15,000 for stenography fees related to earlier matters.
Mr Hayden asked that the oral hearing be deferred so as to allow his side
adequate time to prepare submissions for the March 7th hearing concerning the
The hearing was “not a matter of small import” and “goes to the heart of the
constitutionality of the Act”. Mr Hayden said the court would be asked to
construe the Act and he would be making the case that for the Act to be
constitutional, it must allow the court to lift the stay on the Quinns’ action.
The judge said if an issue arose from the March 7th hearing regarding the
validity of the Act, the attorney general would have to be put on notice.
The hearing would not be deciding the issue of constitutionality, he
The judge added that he believed the Quinns’ lawyers had adequate time to
prepare submissions both for the March 7th and March 19th hearings and he
refused to defer the latter date.
The Irish Times also reports that the failure to repossess people’s homes may be contributing to the duration
of the economic crisis, a conference organised by the Central Bank heard
A banking expert with the International Monetary Fund told the conference
that those states in the US that have a record for quickly foreclosing on
mortgages in arrears are recovering more quickly from the housing crisis.
Michael Moore, speaking in a personal capacity to a conference called How to
Fix Distressed Property Markets, held in Dublin yesterday, said the figures
supported the view that faster foreclosures contributed to the quicker
resolution of housing and mortgage crises.
Another speaker, economist Anthony Murphy of the Federal Reserve Bank of
Dallas, said the lack of repossession of houses in Ireland by the banks was
“crazy and really strange”. A former academic with UCD, Mr Murphy said that
while the level of foreclosures in the US might be too high, the level in
Ireland – zero – was too low.
Mr Moore said the rules in the US force banks to recognise deteriorating
loans promptly and to take them off their books. This keeps the level of
non-performing loans on the banks’ books at very low levels.
It would be very unusual for the type of high levels seen in Ireland to exist
in a US bank, he said. He said that one of the advantages of prompt repossession
was that it removed the option of strategic default.
In his opening remarks to the conference, the governor of the Central Bank,
Prof Patrick Honohan, said household financial distress was at unprecedented
levels in Ireland. This was evidenced by the extraordinary rate of arrears on
He said that early on in the crisis, because of the danger that some
creditors might pursue distressed debtors in an aggressive manner, a code of
conduct on mortgage arrears was introduced.
He said the Central Bank was “ramping up” its engagement with the banks as
they seemed to be behind the curve in addressing the arrears problem on a
The Irish Examiner reports that thousands of jobs and a significant addition to the country’s wealth should
come from a EU-US trade agreement, offering opportunities to Irish SMEs as well
as multi-national business, according to Enterprise, Trade and Innovation
Minister Richard Bruton.
The EU and the US announced they had after 18 months of talks agreed to start
negotiations on what will be the world’s biggest ever free trade agreement,
eliminating barriers between the two blocs that between them account for almost
half the world’s trade.
But almost as soon as the announcement was made, the first cracks appeared in
the discussions with the EU saying that issues like genetically modified
organism s and hormone beef would not be part of the package, and the Americans
saying everything was on the table.
Ireland will have a pivotal role to play in the opening stages of the talks with
Mr Bruton chairing the trade council of ministers. The first job will be to set
out the details of the mandate which will then be handed to the European
Commission that will conduct the negotiations.
It would also be worth at least €100 million a year to Ireland in reduced
tariffs on exports to the US and is a “top priority” for the Irish presidency,
according to Mr Bruton.
The Government hopes that an informal EU Council meeting of trade ministers in
Dublin in April will give the go ahead for talks to get formally underway.
“I do not underestimate the difficulties in either getting this underway or
completed but if we are to anchor the transatlantic economic and political
relationship we have to rise to the challenge,” Mr Bruton said.
It comes after US President Barack Obama used his state of the nation address on
Tuesday night to announce his intention to begin talks.
The minister pointed out that 115,000 people in Ireland are directly employed in
over 700 US firms while Irish companies employ about 120,000 in the US. It
accounts for almost a quarter of Ireland’s exports. Reducing barriers to trade
will help more SMEs export as just 13% of the EU’s SMEs export outside the EU,
the minister said.
He estimated that an ambitious trade deal could lead to a 2% increase in growth
and create more than 2 million jobs or an additional 1% of the EU’s total
workforce. Other reports say it could boost the EU’s GDP by €86 bn a year and
that of the US by €65bn.
“This will reinvigorate the transatlantic economy, adding worthwhile jobs and
economic growth to struggling economies,” he said adding that it will involve
the broadest spectrum of interests and stakeholders and present many challenges
for both sides.