Brian Cowen (Laois-Offaly, Fianna Fail)

First, the agreement that was concluded last weekend is primarily about making sure there is sufficient funding for the State. A total of €50 billion of the drawdown will be for the funding of the State in the coming years as we reduce our deficit and get our public finances back into order. A total of €25 billion of the €35 billion drawdown facility is available on a contingency basis for the banks and €10 billion is for recapitalisation. The majority of the agreement relates to the funding of the State but obviously the banking issue must be resolved as well.

Second, on the question of the minimum wage, the issue is that it also forms a base for other wages further up the line. We have seen an increase in the minimum wage beyond the level of inflation since it was introduced. It was increased by 55% during a period when inflation was 28%. We must try to ensure that we have a competitive economy. It is difficult. We have seen reductions in wage rates across the board in the public sector and in the private sector as well. The brunt of adjustments in the private sector has been on the basis of redundancies and increased unemployment. We have had to also ensure there is full flexibility within the system as well. Therefore, in labour intensive sectors such as retail and tourism where many jobs have been lost, there is a need to try to ensure that we have flexibility in that area. The reduction in the minimum wage is about making sure that we have a competitive economy. It is part of a wider range of adjustments that is taking place throughout the economy. It is important we also recognise that we will still have one of the highest minimum wage rates in the European Union as a result.

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