EU forced Ireland to cut minimum wage - Gormley

The government was forced into cutting the minimum wage by the European Commission, according to the leader of the Green Party .

The rate is to be cut by one euro an hour under the four year €15bn austerity plan published by the government on Wednesday.

The Department of Finance has denied Mr Gormley's claim, maintaining that the commission did not have prior sight of the plan or make demands of it.

John Gormley said the cut to €7.65 an hour was one of the conditions set down by economics commissioner Olli Rehn.

Criticising Fine Gael's vow to reverse the cut, Mr Gormley told the Dáil that the pledge was "completely nonsensical because this was the first demand of Olli Rehn and others that this had to be in the plan."

The Department of Finance has denied Mr Gormley's claim, maintaining that the commission did not have prior sight of the plan or make demands of it.

In a statement, the department said: "The EU/IMF/ECB saw an outline of the plan over the weekend and indicated their broad approval.

"The Cabinet have had long intensive meetings on the plan in recent weeks and nothing was taken out or added to the plan on the instigation of these international bodies."

A spokesperson for Mr Rehn also denied the claim.

"This is not our plan," he said. "It is the government's plan and it is up to the Government to put into it what they wish."

The spokesperson would not say, however, whether reducing the minimum wage would be a condition of the EU-IMF bailout when it is agreed with the Government.