Taoiseach Brian Cowen has defended the proposed cut to the minimum wage, saying the new rate would still be one of the highest in the European Union.
Mr Cowen was speaking during Leaders' Questions in the Dáil this morning.
The proposal would mean the rate would be cut from €8.65 to €7.65 per hour.
Mr Cowen said there was a need to make the economy more competitive and said the rate in recent years was increased beyond that of inflation.
He was responding to questions from Labour leader Eamon Gilmore, who asked the Taoiseach if he would admit that the move would not save a 'single cent' for the Exchequer.
Mr Gilmore also asked the Taoiseach where the idea for the cut came from.
Mr Cowen said the Government took the view the rate cut would remove some barriers to employment.
He also said the cut had to be the way for the 'immediate future'.
However, Mr Cowen said over time, as things improved, the Government would look to see people being able to raise their remuneration levels again.
Meanwhile, the Taoiseach has said a plan regarding the winding down of Anglo Irish Bank will be submitted to European authorities in January.
Mr Cowen said the wind down of the bank's loan book will take place over several years.
Fine Gael leader Enda Kenny suggested the Taoiseach was at odds with the Governor of the Central Bank Patrick Honohan, who earlier this week said the bank would be wound down over a matter of weeks.
