Minister for Finance Michael Noonan has said the minimum wage will be restored to €8.65 under revised terms of the EU/IMF bailout.
Speaking during a press briefing with Minister for Public Expenditure and Reform Brendan Howlin, Minister Noonan said the Government has met the conditions of Ireland's rescue package for the first quarter.
A revised memorandum of understanding will be signed off on by 16 May.
No details of the agreement have been published as yet.
In a statement, the 'troika' of the European Commission, European Central Bank and International Monetary Fund said the 'programme is on track but challenges remain.
The international partners said that the targets for the end of December and March were met by what it called a 'comfortable margin'. The budget deficit is projected at about 10.5% of GDP in 2011, added the troika.
However, Mr Noonan conceded today that so far 'there isn't confidence in the Irish economy.'
But the minister said growth projections can be influenced by Government policy and the jobs initiative to be announced next month will be part of that.
He confirmed that employers' PRSI is to be cut to counteract the increase in the minimum wage.
Brendan Howlin said difficult and demanding targets had been set and the Government was determined to achieve them.
'The Government is determined to get itself out of the current situation and to fund itself on the markets as any normal country would do.'
Asked about possible increases in tax, Mr Noonan said if the comprehensive spending review process is successful it will eliminate the need for tax increases.
The minister added that the troika strongly approves of the bank recapitalisation and the stress tests carried out. It wants the banks to be fully recapitalised by 31 July.
Up to €35bn had been allowed for recapitalisation under the last phase of the agreement, but that has now been reduced to €24bn.
Mr Noonan said the Government does not want to make pay cuts but had to make savings in the payroll bill.
'There is a provision that there will be further cuts in pay unless savings from other areas are achieved in quarter three of the agreement.'
Minister Howlin said the Government is setting the scene with regard to public sector pay. He said that savings under the Croke Park agreement had to be met.
'Important and real' decisions had been made by the Government, Mr Howlin added.
He said Ireland's international partners have accepted and endorsed the actions of Government and the achievements so far.
Action needed to restore confidence
Taoiseach Enda Kenny has said that the action being taken by the Government is needed to restore confidence.
He said there are signs that international confidence is returning to the Irish economy as a result of Government action on the banks and bondholders.
SIPTU President Jack O'Connor warned that any move by the Government to abolish employment regulation orders or agreements will be vigorously resisted.
Mr O'Connor said Fianna Fáil leader Micheál Martin should clarify whether his party in government had agreed with the EU/IMF to abolish sectoral pay agreements.
However, Fianna Fáil's Willie O'Dea said Mr O'Connor had attempted to 'muddy the waters' in relation to the agreement.
He said: 'Jack O'Connor's attempt to suggest that Fianna Fáil may already have made an agreement on their future is incorrect, disingenuous and raises the question why he would choose to make this intervention at this time.'
Legal and medical professions set for 'shake up'
The medical and legal professions seem set for a major shake up as part of the Government's jobs initiative to be announced next month.
Although he refused to go into detail today at the Government's press conference, Michael Noonan said areas like the legal profession and entry to the medical profession ‘have been barriers’ and they are being looked at.
Later at the troika briefing, Istvan Szekely of the European Commission also spoke about the ‘sheltered sectors’ of the jobs sectors.
He mentioned the legal profession, in particular legal fees, and also the pharmaceutical area and said the aim is to make the consumer the king, increase competition and allow the sector to lower prices.
He added that proper regulation was also part of the plan.
Meanwhile, Ajai Chopra of the IMF described the programme agreed between the troika and the Government as 'a lifeline for Ireland' and said it was 'an Irish solution to an Irish problem.'