Ireland's government should cut public sector pay again to get its budget deficit under control, the ECB's departing chief economist Juergen Stark said in an interview published on Monday. Stark's comments, made hours before his shock resignation on Friday, heap pressure on Prime Minister Enda Kenny to go beyond the 3.6 billion euros ($4.9 billion) in austerity measures planned for next year and put his government's pledge to protect public sector wages under scrutiny.
"The government should be even more ambitious in cutting the public deficit ratio, which is still at double-digit level," Stark was quoted as saying in the Irish Times interview.
"From a political point of view - on which in principle I have no comment - one needs to consider that other countries of the euro area provide financial support to Ireland, (countries) in which the wages of the civil service are significantly lower.
"This needs to be corrected." Stark, the top German at the European Central Bank, resigned in a conflict over its bond-buying programme but remains on its board until a successor is appointed. Analysts said his comments reflected a view in Frankfurt that Ireland needed to do more to ensure its 85 billion euro bailout is a success.
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