A leading economist has said it will not be possible for Ireland to achieve a good financial position without substantial reform. Peter Bacon told the MacGill summer school in Glenties, Co Donegal, that those reforms should include a reduction in the minimum wage.
Mr Bacon, who advised the Government to set up NAMA, said the pieces of the jigsaw were there to fix Ireland's problem, but the way to do it was not.
In his lecture on 'Steps to Economic Recovery', the economist highlighted a reduction of wages - including the minimum wage - public sector reform, and difficulties with social welfare contributions and benefits.
Mr Bacon said the downward adjustment of nominal wages could not be avoided, and he would not exclude the minimum wage.
He said public sector reform is about creativity, and there was a need to bring in outside experience for public sector rationalisation.
Dr Bacon said Colm McCarthy's spending report should become an 'early bird' menu. He emphasised that reforms should happen quickly and not over a protracted period of time because that would mean dulled confidence in the Irish economy.
Legal judgement reassures Gleeson on NAMA
Meanwhile, former attorney-general and AIB chairperson Dermot Gleeson has said that NAMA could avoid legal challenges because of a previous legal judgement.
Speaking at the MacGill Summer School, Mr Gleeson said that one legal point reassured him about NAMA.
'There is a little known judgement that says that the Irish constitution requires semi-state bodies, even commercial state bodies, to always behave in a way that is fair and reasonable,' he said.
Mr Gleeson said those rules did not apply to private sector bodies, but they would apply to NAMA. 'There is a constitution imperative for that exercise to be done in a way that is fair and reasonable,' added Mr Gleeson, referring to the valuations of properties which will be transferred from banks.
'An excellent chance exists of NAMA serving its public policy purpose and avoiding unnecessary challenges,' Mr Gleeson said.
