Coalition to avoid cuts in public pay
Government will insist Croke Park deal is 'working' when Troika visits
THE Government is "desperate" to maintain industrial peace and is to insist that the Croke Park deal is "working well", when the EU/ECB/IMF Troika arrives back in Dublin in 10 days' time.
The FG/Labour coalition has repeatedly stated publicly that if necessary savings are not achieved under Croke Park, then pay cuts will be back on the agenda.
However, behind the spin, both coalition parties are driven to avoid reducing pay at all costs, because of the fear of industrial action by the public sector unions.
The Croke Park deal guarantees there will be a reduction in public sector numbers of 25,000 by 2014 in return for a guarantee of no further pay cuts for public servants.
The controversial deal has been highly criticised as unrealistic given the need to borrow at least €18.2bn this year just to keep the State running.
However, despite the deficit, several senior government sources have told the Sunday Independent that they are to argue to the Troika, when they arrive back in Dublin on October 11, that the necessary savings have been achieved and that pay can remain off the table.
This news comes despite repeated studies that have shown public sector pay to be between 33 and 44 per cent higher than the private sector, and that State employees in Ireland are among the highest- paid in Europe.
"Everybody is happy, Croke Park is working well and we are achieving the reforms and the savings required. So certainly our mantra, when we meet the Troika, is the Croke Park deal is working," one senior government source said yesterday.
"It is not a case of industrial peace at all costs, but certainly we are keen not to cut pay if we can avoid it," the source added.
A recent top-level confidential document from Taoiseach Enda Kenny to ministers and senior staff obtained by the Sunday Independent, revealed that the Government is committed to a course in which all other avenues will be prioritised before further pay cuts for public sector workers will be countenanced -- despite the worsening economic conditions.
"Government does not want a situation where public pay rates are cut," the note said. It stated that the Government will continue to push for reforms under the Croke Park Agreement but acknowledges there is a limited "window" in which to achieve those reforms before the IMF will insist on wholesale reductions, including salaries.
It states that the Government does "not want to see pay cuts happen and we've got a time window now in which to implement in full the [Croke Park] agreement."
The Troika will arrive to carry out its fourth review, which will be the most demanding review so far. The Government has to "achieve savings arising from efficiency-enhancing measures and from reductions in public service numbers, including the overall public wage bill".
The Government also has to complete its Comprehensive Review of Spending if it is to get the next batch of bailout money. Other reforms include reductions to public sector pensions, which were announced last week; further reforms to the banking system (which have already been achieved); the sale of some semi-state assets including the ESB; as well as measures to increase competition in so- called sheltered sectors like the legal and medical professions.