Minimum Wage 'Forced By IMF'

Green Party leader John Gormley has revealed the cut in Ireland's minimum wage was demanded by the International Monetary Fund.

Speaking in the Dáil today, Mr Gormley said during an exchange with Fine Gael's TD Phil Hogan that the cut in the minimum wage by 12% was one of the stipulations of Economics Commissioner Olli Rehn.

Mr Gormley said Fine Gael’s pledge to revisit the issue was not credible, as Europe would not permit it.

"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 revelation resurfaces the question of Ireland's loss of sovereignty due to the bailout and that an EU and International Monetary Fund (IMF) agenda was forced on the Irish people.

The IMF is an intergovernmental organization that oversees the global financial system, but is known to have a heavily right wing outlook. A visiting International Monetary Fund official in Bucharest in October rebuked union demands for an increase to the minimum wage in Romania as the country introduced its own austerity plan. The current minimum wage in the Eastern European country is just 600 lei, or €145 per month.

The Department of Finance has denied Mr Gormley’s assertion, maintaining that the commission did not have prior sight of the plan or make demands of it.

Meanwhile, a spokesperson for Mr Rehn said: "This is not our plan. It is the Government’s plan and it is up to the Government to put into it what they wish."

The cutting of Ireland's minimum wage has been defended by the Government as a way of driving down costs to businesses and of lowering wages in the economy. However, groups such as Social Justice Ireland are arguing that the weak, the sick and the working poor are taking an unfair proportion of the hit as Ireland struggles to recover from the "reckless actions of greedy bankers, incompetent regulators and an inept government".

"The Plan is good for the rich and strong such as bond-holders and corporate sector who are not being asked to shoulder any part of the adjustment required to secure Ireland’s viability into the future.

"It is important to remember that much of Ireland’s current problems were caused by elements within the corporate sector. Both the senior bond-holders and the corporate sector should make a contribution towards rescuing Ireland from its current very difficult situation."

A spokesman for Social Justice Ireland added that the reduction in the minimum wage meant that people who are the lowest-paid in Irish society are facing a reduction of €40 a week in their salary. "This is unjust and unnecessary," he said.

This morning, Éamon Ó Cuív, Minister for Social Protection accused Social Justice Ireland of "scaremongering".

(DW/GK)