Irish recovery plan falters over pay deal

Irish employers and unions headed into critical national recovery talks with the government this week, which were as much about maintaining two decades of partnership as rescuing the country from economic oblivion.Talks between the Irish Congress of Trade Unions (ICTU), the Irish Business and Employers Confederation (IBEC) and the government on a national recovery plan had been adjourned when finance minister Brian Lenihan delivered the toughest budget in the history of the country on 7 April. The special 1 per cent levy on incomes – introduced in the last budget only six months ago – has been doubled to 2 per cent and will be applied to all salaries of more than €15,000 (£13,270), thereby including those on the national minimum wage. People on the minimum wage had been excluded from the levy, but as the government raises taxes to find its way out of debt, Lenihan said that the new reality means that the tax base will have to be extended.