'Old-style' partnership deal unlikely

Government sources have said that it is very unlikely that a deal would be reached on an 'old style, traditional' social partnership agreement.

A provisional deadline for reaching agreement on a national economic recovery plan had been set for today.

Sources said a traditional deal, which would usually include some element of national agreement on pay, did not suit the current economic climate.

Earlier, employers group IBEC said talks are at a crucial stage.

Director General Turlough O'Sullivan said with unemployment approaching 500,000 and thousands of firms closing down, the Government faced a stark choice.

It could either borrow to fund welfare payments, or they could spend what money they can under-pinning businesses to keep them going and protect jobs.

He said IBEC wanted the Government to address difficulties facing companies doing business with the UK, where labour and other costs are significantly lower than in Ireland.

He urged the Government to introduce a PRSI holiday for employers and a trade credit insurance scheme and ease rules in state aids as was happening in many other countries.

Meanwhile, General President of SIPTU Jack O'Connor said he does not believe there will be a partnership deal, unless there is a considerable change of heart on the part of the Government.

He said he believed the Government did want a deal, but that there is a fear that international finance capital would look on disapprovingly if they do anything.

Speaking on RTÉ's Morning Ireland, Mr O'Connor said the Government would have to be more courageous if there is to be an agreement.

Unions had called for a €1bn plan to create and protect jobs claiming the jobs crisis requires the same urgency, focus and attention as the banking crisis.

The Irish Congress of Trade Unions said the plan would see all the machinery of the State harnessed to tackle the unemployment crisis.

Under the plan, the €1bn fund, involving existing as well as new resources, would be used to ensure redundancy becomes a 'last resort' and people are guaranteed access to training.

The ICTU says its plan envisages changes to existing employment and redundancy law, tax law, and the social welfare code to remove barriers to work and training.

Among the proposals are State support for short-time working and reforming social welfare to support alternatives to redundancy.

The plan would also see the creation of a social innovation fund. This would be used to support initiatives and schemes designed to meet serious social needs and allow unemployed people put their skills to work.

Asked about the ICTU proposal for a €1bn plan for jobs, IBEC's Mr O'Sullivan said employers and unions are singing from the same hymn sheet.

He said the question was whether the money can be spent wisely to train people and - more importantly - to support enterprises that might otherwise go out of business.

He acknowledged that the Government did not have a lot of money but he said IBEC had always felt it was justified to borrow for productive purposes whether that was for infrastructure or to protect jobs - adding that the ICTU proposal fell into the latter category,.

Regarding serving TDs refusing to give up ministerial pensions, Mr O'Sullivan said it was ludicrous to have people in a job drawing a pension.

He said the Government should simply legislate to take he pensions from them.