Ireland given more time to reach pay deal with unions

DUBLIN Tue May 7, 2013 4:30pm EDT

Ireland's Minister for Public Expenditure and Reform Brendan Howlin, speaks during a budget news conference at Government Buildings in Dublin December 5, 2011. REUTERS/Cathal McNaughton

Ireland's Minister for Public Expenditure and Reform Brendan Howlin, speaks during a budget news conference at Government Buildings in Dublin December 5, 2011.

Credit: Reuters/Cathal McNaughton

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DUBLIN (Reuters) - Ireland has another week to try to reach an agreement with public sector unions over a pay deal seen as crucial to helping avoid industrial unrest after a minister granted an extension to Tuesday's deadline.

Government plans to make deeper budget cuts while avoiding the kind of unrest seen in other euro zone countries were upset when a majority of public sector workers in April refused to extend a three-year-old pay accord.

Ireland's spending minister, Brendan Howlin, said on Tuesday that labor relations mediator Kieran Mulvey, who has spent the past two weeks trying to find a basis for a deal, must conclude an agreement over the coming week.

Howlin said he planned to present a full report to the cabinet on May 14, and the extra time would allow Mulvey to explore potential areas of agreement arising from the talks so far.

The rejected deal - which proposed pay reductions for higher earners, longer working hours and cuts in premium payments - sought to save a further 1 billion euros ($1.3 billion) until 2015 as Ireland seeks to exit its EU-IMF bailout this year.

The government has said it needs 300 million euros of savings penciled in for this year to meet its budget targets, with the relevant measures due to take effect from July.

($1 = 0.7642 euros)

(Reporting by Sarah Young; Editing by Alison Williams)

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