Billy Timmins (Wicklow, Fine Gael)
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Question 20: To ask the Minister for Finance his ambitions for the current round of social partnership talks. [12541/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Talks on a new national partnership agreement to follow Sustaining Progress commenced recently. Although it would be imprudent to make any detailed statement at this stage about these talks, I will say that I am concerned about the decline in cost competitiveness in recent years. This is having an impact on employment in the exposed sectors of the economy. We must maintain and improve the attractiveness of Ireland as a location for inward foreign direct investment.

Wage increases in Ireland have significantly exceeded those of our major trading partners for some time. Increases under Sustaining Progress are somewhat lower than previous agreements, on average about 4% a year. However, these increases are markedly above those being experienced in major European economies and it is important, in any new agreement, that pay increases are kept at, or below, those of our European partners.

Fundamentally, in concluding a new pay deal we must ensure that we do not adversely affect the long-term competitiveness of the country. If pay increases under the next agreement are not kept at a moderate level and do not take account of pay levels in competitor countries, we may see the beginning of job losses in vulnerable parts of the private sector.