Taoiseach Brian Cowen has said he made no mention of the International Monetary Fund (IMF) when responding to comments by a senior trade union official this morning.
Mr Cowen, on a trade mission in Japan, was asked about comments made by Dan Murphy, the general secretary of the Public Service Executive Union. Mr Murphy had warned that the State's borrowing figures were unsustainable and, if not curtailed, could possibly lead to the IMF ordering mass dismissals of public sector workers in the future.
"The comments that he has made are based on the evidence…provided by Government in our discussions with trade unions and the trade union movement as with other social partners must be given the opportunity and we expect to have to hand imminently some ideas and responses from them on foot of those briefings," Mr Cowen said.
He also said that the comments highlighted the need to "get real" about meeting the economic challenge.
However, he later rejected reports that he had warned the IMF may be called in, saying Ireland's debt position is relatively low by international standards. "We are a member of the euro area and we have the best-performing economy in the last 10 years in the European Union," Mr Cowen added.
The Government also issued a statement today saying recent briefings to the social partners had made no reference to the IMF. The statement also pointed out that the Taoiseach himself had made no reference to the IMF in his comments in Japan today. The Government statement was issued in response to his comments being interpreted by some media outlets as having the Taoiseach himself referring to a possible intervention by the IMF.
The statement points out that the "Taoiseach was referring to the economic and fiscal briefings provided by the social partners. Those briefings, which made no reference to the IMF, set out what the fiscal position will be if no corrective action is taken."
It continues: "In those briefings, the Taoiseach stated clearly that the Government is determined to take the necessary action so as to ensure the stability and sustainability of the Irish public finances."
The statement said that, in that context, the Government has agreed a five year strategy which is reflected in the addendum to the Irish stability programme which was sent to the EU Commission and published last Friday.
"In assessing Ireland's ability to address the challenge ahead it is important to note that Ireland's debt position of 20 per cent of GDP at the end of 2008 is relatively low by international comparisons," it concludes.
The IMF said this afternoon there was no reason to think that Ireland will need IMF financing. "The authorities have been clear today. We agree. There is no reason to think that IMF financing will be needed," an IMF spokesman said in a statement.
Mr Murphy wrote to branch secretaries of his union warning that the IMF might take action if public borrowing was not curtailed. He said that the public deficit could reach €15.5 billion by 2011 unless changes were made in the tax regime and in public sector spending.
If the IMF were to intervene, wrote Mr Murphy, it could lead to mass dismissals being forced upon the public service. He emphasised the need for a solution to the current serious situation.
Mr Cowen was asked during an enterprise event in Tokyo this morning about his opinion on Mr Murphy's letter and his warning about excessive borrowing and its reference to the IMF.
Mr Cowen said Mr Murphy "was a very experienced trade unionist and one that has been involved with social partnership for a long time".
He said that Mr Murphy was referring to the previous experience in the 1980s. Back then, the taking of timely action was how prosperity was regained and sustained in to the future, he said.
Mr Cowen was speaking during his five-day official visit to Japan. The Taoiseach announced that €46 million worth of new contracts and agreements had been concluded by Irish companies in Japan this week. Two Japanese companies also announced the creation of 150 jobs in Ireland.
The companies who made the announcements included Glen Dimplex; Parc Aviation; Waterford pharmaceutical company Eirgen; Dublin upholstery company Botany Weaving; Aviation Services; and Direct Personnel.
Enterprise Ireland chief executive Frank Ryan said that Japan was the second biggest market in the world but accounted for only 1 per cent of Irish indigenous exports.
"Japan is therefore one of the key, high-growth markets identified in our current three-year strategy." Some 70 Irish companies are participating in the trade mission that coincides with the Taoiseach's visit.
