Public sector bill must come down - Cowen

The Taoiseach has told an Ógra Fianna Fáil conference in Co Donegal that the overall public sector pay bill would have to have to come down in next month's Budget.

He also said there would have to be an adjustment in social welfare expenditure.

Mr Cowen told delegates that Ireland faced a severe economic crisis, and that while the last 18 months had been very difficult the next two years would not be any easier.

Speaking to journalists, the Taoiseach also said everybody would be disappointed to see a strike by teachers.

Mr Cowen there is a big problem with the public finances and it was his view that we are better to make our contribution by putting our views on the table rather than engage in strike action.

Earlier, Minister for Social Welfare Mary Hanfin told delegates she would consider any realistic cuts proposals put forward by the Opposition.

Meanwhile, Labour leader Eamon Gilmore has said a €4bn adjustment in the public finances was necessary.

Speaking at a party forum in Dublin, Mr Gilmore said his party will publish proposals on saving €4bn in public expenditure before the end of the month.

However, he warned that cutting public pay without agreement will result in industrial conflict with workers who have industrial muscle.

Mr Gilmore said the public sector pay bill can be reduced by negotiation.

He also claimed the Government is leading Ireland into a period of social division and social conflict and that Taoiseach Brian Cowen is listening to hardline commentators rather than constructive proposals.

Fine Gael has said it will publish its costed budget proposals before the end of the month.

Deputy Leo Varadkar says the proposals will not be part of next Tuesday's pre-budget Dáil discussion and said it is up to Fianna Fáil to show what they will do in the Budget as their policies caused the crisis.

Minister for Finance Brian Lenihan warned on Thursday that if Ireland does not make a €4bn adjustment it faces a 'colossal amount of borrowing'.

The Minister will deliver his Budget on 9 December.