The Taoiseach has told the Dáil the Government will finalise its arrangements for cutting €2 billion in spending next Tuesday, and will then announce the outcome.
Brian Cowen said the Government would know by the end of the week whether a deal with the social partners on spending cuts was possible. Mr Cowen also told the Dáil that taxation changes in the medium-term would be needed to close the gap between Government income and expenditure.
Talks on a new national recovery plan are continuing at Government Buildings.
Earlier, arriving at the talks, the director general of employers' group IBEC said he favoured capping executive pay as a gesture to lower paid workers.
Turlough O'Sullivan said he had taken a 6% pay cut, while the pay of other staff in IBEC was frozen. He also confirmed that subscriptions from IBEC members would not rise this year, and were unlikely to rise next year.
Mr O'Sullivan said that despite their call for deferral of all pay increases for at least a year, employers remained committed to social partnership. But he warned that business was under huge pressure.
He said that he had invited union leaders to meet representatives of businesses to hear at first hand about their problems. Mr O'Sullivan said that while broadening the tax base might be necessary, it was essential that the Government did not increase the burden of corporate or personal tax. Asked what was left, he said the level of public spending must be looked at.
Union negotiators were also at Government Buildings. The Government was presenting them with a framework document containing a number of headings for discussion as priorities for stabilising the public finances.
Informed sources said the headings included taxation, the banking crisis, the public finances, unemployment, and a commitment to reflect a pact with some dimension of social solidarity.
Meanwhile, ICTU general secretary David Begg - in a letter to employers' group IBEC - has formally rejected an employer demand for a deferral of the current pay deal and an 'indefinite delay' to a rise in the minimum wage.
But the chief executive of Chambers Ireland Ian Talbot echoed IBEC's call for deferral of pay rises. He said it was time for specific proposals to be put on the table, but that if a deal could not be reached through agreement, the Government would have to lead.
