Irish budget talks collapse; still room for cuts

[Joanne98]

DUBLIN, Feb 3 (Reuters) - The Irish government failed on Tuesday to win support from trade unions for 2 billion euros ($2.6 billion) in budget cuts but ratings agencies said it still had other options for reform to fend off a downgrade.
Prime Minister Brian Cowen, whose approval ratings have nosedived as recession has gripped the former "Celtic Tiger" economy, has vowed to press on with plans to slash public spending and an announcement is expected later on Tuesday.
The government does not need the unions' consent to cut spending but the failure to agree a deal is a sign of cracks appearing in a long-standing social consensus that has underpinned Ireland's drive to become one of Europe's most prosperous countries.
Talks broke down in the early hours of Tuesday, ahead of a key cabinet meeting, after unions resisted calls for pay cuts and discussions on higher pension contributions failed to seal a deal.
Unions downplayed the risk of social tension due to the breakdown in talks.
"It would be very premature to jump to the conclusion that there will be threats of industrial action," a spokesman for the IMPACT union, which represents public sector workers, said.

http://www.guardian.co.uk/business/feedarticle/8340007

The rating agencies are acting like the IMF!