The Taoiseach says the Cabinet will be briefed today on the Croke Park 2 deal. The head of the Labour Relations Commission (LRC) Kieran Mulvey has been working on bringing both trade unions and the government together to see if there is any basis for reopening talks on the deal.

It comes after the proposals were rejected by the majority of union members across the country.

Today the Cabinet is expected to grant a request to the LRC chief for more time to liaise with the unions on the proposals to cut €1 billion from the public service pay bill by 2015.

Mr. Mulvey will also meet with SIPTU and the garda unions - the GRA and AGSI - later.

'Threat to Irish economic recovery'

On Friday the European Union said the rejection of the Croke Park 2 deal would pose a threat to Irish economic recovery this year. In its spring economic forecast the EU said the planned wage bill savings of €300 million this year need to be materialised.

The EU also warns that the cost of liquidating IBRC could be higher than anticipated.

Overall it found an encouraging economic performance by Ireland which has now completed two-thirds of its adjustment programme. The economic forecast also warned that recession in the Eurozone will continue for the rest of this year, with unemployment remaining at record levels but signs of recovery may emerge in 2014.

The report says unemployment in Ireland is set to be lower than in earlier projections but this is mainly on account of stronger-than-expected emigration flows.

Speaking on his way into Government Buildings this morning the Taoiseach Enda Kenny says he hopes progress is being made.