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Further coalition fallout over cut to minimum wage

Mary Coughlan says the €1/hr cut to the minimum wage was the government’s own choice – contradicting John Gormley.

Mary Coughlan has insisted that the minimum wage was cut as a government idea, and not on the demands of Europe.
Mary Coughlan has insisted that the minimum wage was cut as a government idea, and not on the demands of Europe.
Image: Niall Carson/PA Archive

THE FIANNA FÁIL-Green Party coalition has fractured even further after ministers from the two parties offered differing stories on whether the €1-an-hour cut to the national minimum wage was a voluntary move, or one enforced by the EU.

Gormley yesterday said that the European Commission had made the demand as part of the conditions of the four-year budget plan, defending the move after Fine Gael and Labour promised to reverse it if they come to power after the general election.

The apparent admission came despite strenuous coalition claims that the four-year plan had been the product of the government’s own initiatives, and that the IMF and European representatives had demanded them.

Gormley, however, broke cover and said that the €1 cut to the €8.65-per-hour was the “first demand” of European economics commissioner Olli Rehn, telling Fine Gael’s Phil Hogan:

Your party says now that you are going to renegotiate the minimum wage… and that, I am afraid, is completely nonsensical because this was the first demand of Olli Rehn and others that this had to be in the plan

The Irish Independent reports that the allegation was immediately caught by Labour’s Ciaran Lynch who noted it being at odds with the government’s official line.

The Irish Examiner reports, however, that the Department of Finance immediately contested Gormley’s claim, saying that the European Commission hadn’t been given an advance look at the four year plan before it was announced.

A spokesman for Rehn insisted, too, that the plan was not Rehn’s and that it was “up to the government to put into it what they wish”.

And today, on RTÉ’s News at One, Tánaiste Mary Coughlan insisted that the deduction was an initiative put forward by the government itself, “on the basis that we needed to have a plan for jobs and growth in the economy.”

Ireland had “lost our competitiveness some years ago” and the government’s current moves were an attempt to rectify that, she said.

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Gavan Reilly

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