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Irish talks on 2bn euro cuts fail Irish to announce 2bn euro cuts
(about 2 hours later)
Talks between the Irish government, unions and employers aimed at cutting 2bn euro from public spending collapsed early on Tuesday morning. Irish ministers are meeting to decide how to make 2bn euro cutbacks after government talks with unions and employers collapsed on Tuesday moring.
The Irish coalition cabinet is due to meet later to finalise their cutback plans. Taoiseach Brian Cowen is expected to make an announcement to the Dail after 1600 GMT when the stock markets close.
Taoiseach Brian Cowen said he regretted not reaching agreement with the unions on cutting the public sector pay bill. Public sector workers may have to pay bigger pension contributions which could make up €1.35bn of the €2bn.
The unions believe proposed savings on pensions could disproportionately affect those on middle incomes. This could mean a pay cut of between 5% and 10% - a proposal which proved a stumbling block in early morning talks.
The unions felt these cuts would disproportionately affect those on middle incomes.
Talks with the government broke up at 0400 GMT on Tuesday morning.
The Irish government must find a further 4bn euro in savings next year.The Irish government must find a further 4bn euro in savings next year.
Mr Cowen is anxious to persuade international bond markets that Ireland should retain its triple A rating and that the government is dealing with the country's financial crisis.Mr Cowen is anxious to persuade international bond markets that Ireland should retain its triple A rating and that the government is dealing with the country's financial crisis.