The Irish Independent reports that one in
seven – or 40,000 – public servants faces a cut in their basic wage under the
new Croke Park II deal.
Now more than 290,000 public sector workers will be warned the new deal is the
best they can get as they prepare to vote on the package of €1bn payroll cuts.
Government and union leaders have already begun selling the deal to public
servants by warning it is the best option to avoid an across the- board pay cut.
The higher paid face a major hit under the deal finally hammered out in
Those earning over €65,000 a year face cuts ranging from 5.5pc to 10pc.
The alternative is a government imposed unilateral pay cut, likely to be in the
region of 7.5pc for everybody – instead of the one-in-seven hit in Croke Park
Unions began their sales pitch within hours of the deal being struck, as they
prepared to ballot members in the coming weeks.
Government figures admitted there had been concessions in the talks, including
sparing the lowpaid from direct pay cuts, targeting higher earners and the
scaling back of cuts to premium pay.
But this deal is gone if the agreement is not voted through. “All bets are off
in that case,” a senior government source said.
In a message to members, SIPTU said the alternative to the talks or exiting the
process, as some Public Service Committee Congress Unions chose to do, "is to
incur a pay reduction across all elements of pay".
The deal was struck without the Irish Nurses and Midwives Organisation (INMO),
the Irish Medical Organisation (IMO), the Civil and Public Services Union (CPSU)
The Garda Representative Association (GRA) and the Association of Garda
Sergeants and Inspectors (Agsi) walked out when briefing sessions to start the
negotiations were held several weeks ago.
But yesterday the Public Service Executive Union was one of the first off the
mark to remind members that Taoiseach Enda Kenny would bring in legislation to
cut their pay again, if they did not sign up.
"This union took part in the discussion with the stated objective of maintaining
the guarantee of no compulsory redundancies and no cut in pay rates," said
general secretary Tom Geraghty.
"There will be no further cuts in our members' pay rates and the commitment on
redundancies has been reaffirmed."
However it is understood the deal will allow for compulsory redundancy in some
very limited circumstances – such as when the public servant cannot or will not
be redeployed, or is severely underperforming.
But other avenues must be exhausted before compulsory redundancy is considered.
Mr Geraghty noted that members feared they would exceed the threshold for the
'higher paid' pay cut, but this had not occurred, while increment cuts were not
as bad as feared.
Unions won a number of sweeteners for their members that will help get the deal
over the line, including the unravelling of a pension levy introduced by the
All public servants will get a small relief on the levy of €125 per year.
Plans to increase public servants' working hours by five hours a week were also
In addition, the Government dropped plans to increase the distance public
servants could be redeployed to 80km, from 45km.
IMPACT emphasised that management's opening position was a straight cut to pay
scales for those earning €60,000 a year, "if not lower".
It said the Government had threatened to act on this regardless of whether there
was a wider agreement.
Although it said the €65,000 threshold that was eventually set for a pay cut was
a "political" decision, the union had got a guarantee that pay for anyone
earning less than €100,000 a year may be restored in future.
The executive committees of 19 public sector unions will meet shortly to decide
whether to recommend the deal, which will be rolled out from July if it is
Tanaiste Eamon Gilmore indicated this will be the last time the Government will
look to reduce the public sector payroll.
Attempting to reduce the anger of public sector workers, he floated the
possibility of talks on restoring some lost pay after the 2016 General Election.
"I believe we will be in a different place and those discussions will be about
the improvement of conditions," he said.
The Irish Independent also reports that New
York-based investment firm Royalty Pharma has made a $6.6b (€5bn) approach to
Irish drug maker Elan.
It is seeking to scupper the drugmaker's plan to spend most of the proceeds
from a major drug sale on deals and instead give the money to shareholders.
Royalty Pharma, which buys royalty streams of patented drugs, said today it
planned to offer $11 per share, a 4 percent premium to Elan's closing share
price on Friday in New York, where the company has its primary listing.
Elan announced earlier this month it would raise more than $3.25 billion by
selling its interests in its main drug, multiple sclerosis (MS) treatment
Tysabri, to U.S. partner Biogen Idec and effectively reinvent itself by
splashing most of the cash on acquisitions.
Royalty Pharma, however, said the risks associated with this plan were
substantial, prompting it to offer Elan shareholders a "simple and clear choice"
with a cash proposal it said represented the full value of the company today.
Elan shares in Dublin were up 8.9 percent at €8.68 euros ($11.42) by 1200
GMT. The firm, in which U.S. group Johnson & Johnson is an 18 percent
shareholder, said it would not make a comment on Royalty Pharma's proposal for
the time being.
Deutsche Bank analyst Richard Parkes said the small premium suggested by
Royalty Pharma might deter Elan's shareholders.
"But it's not totally unreasonable," he added.
"I think investors are now faced with a straight question of whether you lock
in the value at a small discount to asset value or you have faith that
management can deliver on its planned strategy of acquiring assets."
Royalty Pharma said it had not received a formal response from Elan and had
been unsuccessful in its efforts to engage with the company since making contact
with it on Feb 18.
It added it was "surprised" by Elan's announcement on Friday that it planned
to return $1 billion to shareholders by buying back some of its shares, because
it did not address the proposed offer.
Following the agreement to sell Tysabri - which accounted for almost all of
Elan's revenue - the Dublin-based company will still receive a royalty on its
Elan said last month it had already spoken to several companies
about potential deals and would look to move quickly over the next 12-18
Royalty Pharma countered that good assets in the industry were in
short supply and that Elan's senior management had little experience in
It reserved the right to reduce its proposal, should Elan strike
any deals or buy back shares.
Royalty Pharma, whose portfolio includes rheumatoid arthritis drugs
Humira and Remicade, last year paid $761 million for a stake in Biogen's MS
Royalty Pharma said it planned to finance the possible offer
through a combination of available cash and debt.
It said it was working with financial advisers led by J.P. Morgan
and lenders led by BofA Merrill Lynch to put in place the necessary debt
financing on the possible Offer.
There had been speculation in 2012 that Biogen might try to buy
Elan outright, following the failure of the Irish company's Alzheimer's drug
bapineuzumab, which it was working on with Johnson & Johnson and Pfizer.
The Irish Times reports that
retired public service staff who receive annual pensions in excess of €32,500
face further cuts under the new Croke Park agreement to tackle the public sector
The deal, which is being resisted by major health
unions, was signed yesterday morning after talks continued throughout Sunday
While draft background documents to the deal also suggest that compulsory
redundancies could apply in certain circumstances where staff could not be
redeployed and who declined voluntary redundancy, unions insist the final
version of the agreement, which is due to be published later today, does not
include reference to compulsory redundancies.
The threshold for pension cuts set out in drafts of the agreement is half the
€65,000 threshold at which pay cuts of 5.5 per cent will kick in.
The pay reductions rise progressively to a cut of 10 per cent from salaries
above €185,000. Pay increments will also be frozen under the new deal.
It is understood about 80 per cent of public service pensioners receive less
than €30,000, so the pension reduction will apply to a relatively small but
significant number of retirees.
Exact level of cut unclear
However, the exact level of the pension cut remains unclear.
The draft agreement, seen by The Irish Times, said the parties noted that the
Government was planning to align cuts to pensions paid to retired personnel to
the reductions being put in place in pay for serving public servants under the
The Labour Court recommendation has not been published in full so far, although
it is expected to be released today. The Department of Public Expenditure made
only a passing reference to the situation in relation to retired public service
staff in its official briefing note on the deal.
Those facing cuts include former taoisigh, former ministers and other office
As a result of the pay deal, Taoiseach Enda Kenny will see his €200,000 salary
reduced to €185,350, while Tánaiste Eamon Gilmore will see his €184,405 salary
drop to €171,308.
Following the 2011 referendum on judicial pay, the salaries of judges will also
be decreased under the new deal.
The Government, which said it would have to introduce legislation to underpin
the agreement, expects a campaign of resistance from unions.
“These proposals constitute a fair and balanced agenda to repair our public
finances,” Minister for Public Expenditure Brendan Howlin said. “All public
sector workers have already made a significant contribution to our economic
recovery. However, these further measures are absolutely required to achieve a
sustainable payroll cost.”
Unions to meet
The executive committees of most public service unions expect to meet in the
coming days to consider the Labour Court recommendation on the deal. By the
weekend it should become clear whether unions are to ballot members and what
recommendation, if any, they are making on the proposals.
However, many of the unions that left the talks process before the agreement was
reached showed no sign of changing their stance. Whether they ultimately decide
to take industrial action remains to be seen. The Irish Medical Organisation
said the proposals “confirmed we were right to walk out of the talks”.
The executive council of the Irish Nurses and Midwives Organisation will meet on
Thursday to agree its next steps.
Fianna Fáil public expenditure spokesman Seán Fleming said the test that should
apply was whether the deal was fair.
The Irish Times also reports that
the family of bankrupt businessman Seán Quinn has claimed the insolvency of
Irish Bank Resolution Corporation means the courts must urgently lift orders
freezing their accounts below €50 million each and preventing them transferring
assets in their international property group. The bank’s undertaking for damages
on foot of which it got those orders is now “valueless”, the family claims.
Alternatively, the family says the special
liquidators of IBRC must lodge up to US$500 million in court to meet any claim
for damages should they win the case.
Mr Justice Peter Kelly said the matter was urgent
and he would hear it next Monday. The price of an injunction is an undertaking
for damages from the party seeking that injunction and it would be wrong to
permit a “worthless” or “hollow” undertaking from an insolvent entity, he said.
Aoife Quinn said in an affidavit it was clear
from recent remarks of IBRC special liquidator Kieran Wallace that any claim the
Quinns may have on foot of the bank’s undertakings for damages will rank as “an
unsecured debt which Anglo will be unable to satisfy”.
The freezing orders has caused considerable loss
to her family and it is “no longer just, equitable or conscionable” that they
remain in place, she said.
The orders had led to termination of standing
orders and direct debits on the accounts of herself, her siblings and other
family members which had led to non-payment of a range of expenses. The “most
striking example” was that mortgage payments on Seán Quinn jnr’s home were not
paid. KBC Bank had appointed a receiver over that property, she added.
They were unable to contemplate new business
ventures or employment, to maintain ordinary banking facilities and were delayed
in getting the full legal advice necessary.
The family claims the appointment earlier this
month of special liquidators to IBRC, formerly Anglo Irish Bank, means it cannot
honour its undertaking to pay them damages should it lose its case against them
over alleged stripping of some US$455 million assets from the Quinn’s
international property group (IPG).
Therefore, they claim, the bank is not entitled
to orders obtained so far in its case, including orders of July 2011 restraining
them transferring IPG assets and orders of July 2012 appointing receivers over
their personal accounts and assets.
When Martin Hayden SC, for the Quinns, moved the
family’s application yesterday, Shane Murphy SC, for IBRC, said he needed to
take instructions from the special liquidators.
The full hearing of IBRC’s action alleging family
members were involved in a scheme to put assets in the IPG beyond its reach has
been deferred pending proceedings against former Anglo chairman Seán Fitzpatrick
and executives Pat Whelan and Willie McAteer.
The Irish Examiner reports that
there is going to have to be significant EU treaty change within the next few
years to enable further EU integration, according to the EU Commissioner for
Economic and Monetary Affairs, Olli Rehn.If there is an EU-wide treaty change, then it would
mean a referendum in this country, which would be a huge challenge either for
this Government or the next administration.
“In the medium-term — 18 months to five years — we envisage further integration
involving treaty changes. Our guiding principle is that any steps towards
increased solidarity and mutualisation of risk would have to be combined with
increased responsibility; that is, with further sharing of budgetary sovereignty
and deeper integration of decision-making,” said Mr Rehn.
The European commissioner was in Dublin for a conference organised by the
chairpersons of finance committees across the 27 EU parliaments. The event was
chaired by Labour TD Ciarán Lynch.
The representative from the Finnish parliament, Kimmo Sasi, said some form of
debt mutualisation in the form of eurobonds is essential if the eurozone is to
survive. However, underlining the extent of the challenges that lie ahead, it is
very unlikely that the Finnish electorate would agree to such a move, said Mr
French senator Philippe Marini asked Finance Minister Michael Noonan what the
update was on harmonising corporate taxes throughout the region.
Mr Noonan said proposals for a common consolidated corporate tax base would be
released towards the latter end of Ireland’s EU presidency, which finishes in
Mr Marini said it was vital that progress was made on it. However, “the view in
France is that Ireland’s [12.5%] corporate tax rate is too low. But it isn’t the
only problem — there is the ‘Dutch Sandwich’ as well.”
Companies such as Google have avoided huge tax obligations by diverting large
profits through Ireland and Holland.
Ireland remains implacably opposed to any harmonisation of the corporate tax
rate, although the Government has agreed to engage in discussions.
Mr Noonan said it was very important that EU states follow through on an
agreement reached at asummit last Jun 29 to break the link between sovereign
debt and member states’ banking systems. The issue of legacy debt remains
unresolved. Countries like Ireland want the ESM to take over legacy bank debt,
although this idea is opposed by Germany, Holland and France.
What to do with legacy bank debt is being looked at by a special committee set
up by the eurogroup of finances ministers and it will report shortly, said Mr
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