The most difficult pay talks since the eighties began last week and did not last too long.

Taoiseach of the time Bertie Ahern did call in and wished them the best and hoped that it would work out, but it seems that employers, unions and Government are fairly wide apart.

The growing cost of living caused by escalating food prices, higher oil heating bills and extra costs at the pumps are having a serious affect on workers and consumers.

Business is faced with higher costs and slowing demand and may not be in a position to pay high wage increases. If the pay talks break down it could be a real test for Brian Cowen.

Will he wheel in the ex Taoiseach to try and broker a deal, or will it be Tanaiste Mary Coughlan? Will she have enough experience to do it as Minister for Labour, Enterprise and Employment.

The cost of living rise of more than 4 per cent is an issue. But the rising euro against sterling and the dollar is not resulting in some goods from the UK and USA reduced in price, as was highlighted in a weekend newspaper report. Can the Consumer watchdog look at this matter?

Rising living standards have been a feature of the last decade but a fall is now likely for a year or two, admittedly from a high level. Some sacrifices may be needed from all sides.

Unemployment has gone from 4.5 to 5.5 per cent in a year and with the construction slowdown this figure is growing. We are likely to have the lowest growth since 1993.

Much has been gained in that period. A wages free-for-all would be a bad outcome and would see many businesses close that should not.

Ireland needs to remain competitiveness. The outcome of the talks is uncertain and may not lead to a conclusion.

What is the best the Government can hope for? Will Cowen show real leadership and display some toughness, the public seems to want more decisive leadership judging from opinion polls.

He has said he will not tolerate dissent in his party, this may provoke some back benchers during the pay talks. How will the Greens react in these current uncertain times?

A fall in the oil price and inflation over the summer months might help clinch a deal but experts are not optimistic.