Labour Party leader Minister for Foreign Affairs and Trade Eamon Gilmore has said he does not believe participation in Government will lead to the party's annihilation at the next general election.

The work of restoring the economy and dealing with the deficit in the public finances was essential to achieving Labour's aims for Irish society, he said. Failure in this objective could mean a second bailout, with cuts of up to 30 per cent in public services, schools being closed and compulsory redundancies in the public service.

This had happened in countries such as Latvia and Greece.

“What kind of conditions do people think would be attached [to a second bailout]? What kind of money do people think would be available? Do people want this period of austerity to continue for another 10 years, another 20?”

Compulsory redundancies

If the Coalition had not addressed the crisis successfully, the State would now be just a few months away from a second bailout. Ireland had come through the crisis to date with essential public services still standing, no compulsory redundancies in the public services, basic rates of social protection being maintained, the reversal of cuts in the minimum wage, and other measures of note.

He said he has been discussing Labour’s position with members of the parliamentary party and that a meeting next week will consider what is to be done. He said numerous ideas were being discussed about how the party could “do things better and communicate our message better”.

He said there were always people in the party more comfortable in opposition. The party “is a place where you can criticise the management without being responsible for doing the management”.

But without addressing the economic and fiscal crisis, he said the State will not have the wherewithal to provide the jobs and public services to which the party aspires. There was no question of the party putting its electoral concerns ahead of the interests of the country. “That has been the ruination of this country; political parties and politicians who put the next election ahead of the . . . interests of the country.”

In an interview with The Irish Times while on a trade mission to Turkey, the Minister said the priority for the party was to end the period of austerity and bailouts and not allow a situation develop where the State needed a second bailout.

“That is what the Labour Party is about. And I will not concede that argument to anybody.”

While there would be no pulling back from the work of restoring the health of the economy, there was a question as to the party’s effectiveness at communicating what it was doing and that it’s approach was “better than the fairy-tale economics being promoted by some of our political opponents”.

Asked about reports that he might switch to a “domestic ministry”, Mr Gilmore said that Foreign Affairs and Trade “is a domestic ministry. No country is as dependent on the outside world as Ireland.” He said the idea of Labour Ministers switching ministries after the end of Ireland’s presidency of the European Union was not under consideration.

He said the members of the parliamentary party were a great team and were full of ideas and very courageous.

“Because the job of work we are doing is not easy. Electorally it is not easy. We have seen some evidence of that in recent times. But the members of the parliamentary party are people of great bottle.”

Increases in taxes

He said that as well as defending some areas from cutbacks the Government had also overseen substantial increases in a range of taxes. He said the introduction of a property tax “has been a bullet that some government had to bite at some stage, and we have bitten it”.

He said he was frustrated with the rate of progress on the issue of people who were having difficulty with their mortgages and wanted to see movement towards a situation were people could have peace of mind again and be able to get on with their lives.

It was Government policy to minimise the number of people who would lose their homes and he did not believe there would be large scale repossessions.

“My view is that that is the scariest thing for most people, losing their homes.”

He said the banks could reschedule or restructure people’s mortgages, or households could move to renting from the bank or from a local housing authority that would take on ownership of their former home.