Ministers to talk up savings on Patrick's day travels
Ministers travelling to far-flung places for St Patrick's Day are trumpeting the fact that Ireland has succeeded in slashing average public sector wages by 15pc, according to a Department of Finance briefing note.
The document, seen by the Irish Independent, has been handed out as a briefing note to the Taoiseach Brian Cowen, 21 ministers and the Attorney General, who have set off to a host of cities across Europe, America, the Middle East and the Asia/Pacific region.
The document also drives home the point that "there are clear signs that economic activity is stabilising" and the Government stands prepared to recapitalise the banks if they are not able to raise money privately.
The unemployment rate is now expected to peak this year at 13.25pc, before declining thereafter, it says.
"Consumer confidence is beginning to recover and is currently close to its highest level in two years," according to the document.
The public sector wage cut incorporates the 7pc levy introduced in April last year, as well as salary cuts ranging between 5pc and 20pc, in the case of the Taoiseach. Most of the 300,000-plus workers in the public sector, including nurses, teachers and gardai, are experiencing wage cuts of between 5pc and 8pc.
The Finance Minister Brian Lenihan is staying at home, having returned from Brussels yesterday from the monthly meeting of euro-zone finance ministers -- where they agreed a strategy for emergency loans in case Greece's austerity package fails to work. A rebound in global market sentiment towards Ireland has largely been attributed to Mr Lenihan setting off last year on a charm offensive in the City of London to coincide with St Patrick's Day.
He used the occasion to play down comparisons between Ireland and Iceland and dismissed speculation that this country would need a bailout from the International Monetary Fund (IMF).
The Department's briefing note highlights that future measures to restore the public finances "will involve further reduction in current public expenditure as well as a broadening of the tax base".
Late last month, Mr Lenihan outlined how he plans another €3bn of measures to cut the budget deficit in 2011 -- through €1bn of capital spending reductions and €2bn by lowering the cost of public service and reforming how income is taxed.
Turning to the troubled domestic financials sector, the document says that a "plan to repair the banking system (is) at an advanced stage".
Mr Lenihan is preparing next week to make a wide-ranging announcement. It will cover the discount applying to the first batch of loans going to NAMA; results of a stress test by the Financial Regulator on the banks' non-NAMA loans; the capital ratios lenders will need to meet, and the amount of equity they need to raise to get there.
The briefing notes said: "If, following NAMA, credit institutions require additional capital, the Government's preference is that such capital should be raised from private sources in the first instance, but if this is not possible, the State will provide the capital in the form of ordinary equity."