Taoiseach Enda Kenny has said public servants cannot expect a "blank cheque" in pay negotiations which are due to start on Tuesday.
Speaking on his way into Cabinet, he said the Government was "not going to do anything foolish" when asked about fiscal warnings emanating from Europe in relation to the Coalition's spending plans for the coming budget.
As part of this broad framework it is understood public service workers are set to gain on average more than €800 each as part of the Government’s reversal of pay cuts, an allocation requiring around €250 million - and possibly up to €300 million - as part of a deal to partially restore pay levels .
The process of beginning the reversal of pay cuts put in place for 300,000 public service staff over recent years will begin on Tuesday when Government representatives hold their first round of talks with trade unions.
European commissioner Pierre Moscovici has warned Ireland must proceed with fiscal consolidation to tackle the State's high public debt levels.
On Tuesday morning Mr Kenny said the Government was "well aware" of what had been flagged by the European Commission.
“On the other hand we have made great progress. We’ll have our deficit eliminated in a couple of years and obviously we want to create 40,000 more jobs,” he said.
Minister for Public Expenditure and Reform Brendan Howlin has responded robustly to Mr Moscovici's warning Ireland must proceed with fiscal consolidation to tackle the State's high public debt levels.
Mr Howlin said the Commission’s “default” position was to urge countries to be prudent, adding that levels of public service reform in Ireland have been met with amazement in Mr Moscovici’s native France.
“We’ve made remarkable adjustments from a deficit in 2010 of a mind-numbing 30 per cent of GDP to a deficit of less than two per cent this year in the spring statement,” he said.
“That’s a remarkable journey so prudence certainly is something we understand. Pierre Moscovici is somebody who has been finance minister in France,” Mr Howlin said.
“And I know from talking to his successor, Michel Sapin, who has been amazed at the restructuring of public services that were managed in Ireland, I don’t think that could have been managed in France.”
Turning to the pay talks, Mr Kenny said Minister for Public Expenditure and Reform Brendan Howlin had been mandated to begin dismantling the emergency financial measures legislation.
“Obviously the Minister himself has pointed out that he doesn’t have a blank cheque and that productivity and continued reform are essential.”
Trade unions will press for a flat-rate increase in pay as this would disproportionately benefit the lower paid.
