Monday 9 December 2019

Unions do u-turn and may now support a default on our debt reporters

Trades unions have changed their approach to our economic future and warned there may be a time when they would support a default on our debt.

Up to now unions had not supported such a move.

But addressing the ICTU conference in Killarney, Co Kerry, ICTU president Jack O’Connor said: “ Opinion is divided as to the potential consequences of threatening default and we have not, thus far, supported the call.

“We may well come to do so and we are conscious that resources are being run down as time passes.”

But he conceded that such a move could have massive implications for jobs and the public services and more importantly he also warned that such a move could result in the ECB pulling essential funding out of the banks.

Mr O’Connor warned the EU will spiral into deflation if expensive bailout regimes continue to be imposed on countries like Ireland, Portugal and Greece.

He said these austerity packages are inspired by the governments of Germany’s Angela Merkel and France’s Nicolas Sarkozy and result in “a direct full-frontal assault on collective bargaining, pay and pensions.”

He added that while overall growth in Europe is improving, this is overshadowed by the threatened default of all of the stressed out country which carry billions in liabilities which could sink the global financial system beyond trace.

“A Marshall aid-type strategy is required to rescue Europe both economically and politically,” he said.

“However, those in charge have opted for the shock therapy of a reparations course instead, ignoring the lessons of history.”

On the domestic front, Mr O’Connor re-iterated union plans for €4bn to be taken out of the National Pension Reserve Fund to boost jobs and for more participation from private pension money in return for exemption from the new levy.

Mr O’Connor said the move would more than offset the deflationary effect of the billions of cuts scheduled for budget 2012 and create upwards of 80,000 jobs, providing an enormous boost to confidence.

"At the same time, the thorny issue of the failure of those with real wealth to contribute in proportion to their capacity to do so must be grasped.

"We can no longer afford the luxury of subsidising the rich and being one of the most unequal countries in the world."

Up to 800 delegates are attending the conference where pay agreements for low earners, the banking crisis and job creation are top of the agenda.

In his keynote speech, Mr O'Connor also hit out at possible reforms to cut the pay of low earners in sectors such as hospitality and security.

He warned people were paralysed by the fear of losing their homes, pensions and jobs - and demanded homeowners making a genuine effort to service their mortgage be given a firm and absolute guarantee that their properties will never be repossessed.

"This is eminently possible in a state-owned banking system and the markets have already priced for it," he added.

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