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Updated Tuesday, December 13, 2011 0:39 am TWN, Reuters



	A Cash for Gold sign is displayed in Dublin City Center, Ireland, Tuesday, Dec. 6. Slowing economic growth and the fallout from the eurozone debt crisis may force Ireland to renege on a deal not to cut public sector wages that has helped the country avoid Greek-style social unrest, a government minister said on Sunday. (AP) Enlarge Photo

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Ireland may have to renege on pay deal: minister

DUBLIN--Slowing economic growth and the fallout from the eurozone debt crisis may force Ireland to renege on a deal not to cut public sector wages that has helped the country avoid Greek-style social unrest, a government minister said on Sunday.

Dublin has pledged not to cut pay and avoid layoffs as long as unions agree to voluntary redundancies and work longer hours under the “Croke Park” agreement, a deal struck in March last year, eight months before Ireland took an EU/IMF bailout.

The deal has been widely cited as the main reason Ireland has not experienced the kind of protests seen in fellow eurozone member Greece, also bailed out by the EU and IMF. Public sector unions signaled they may strike if the deal is breached.

However the government has twice cut its economic growth forecasts for next year since the start of November and energy minister Pat Rabbitte warned that the future of the deal in its current form depended on how those projections play out.

“It may well be the case, especially depending on how things go in the eurozone, that we will have to sit down and talk to the unions about renegotiating that agreement,” Rabbitte told national broadcaster RTE.

“But that depends on growth rates, growth projections and it depends on whether it delivers.”

Ireland has cut public sector wages by an average of 15 percent since 2008 but has been advised by senior officials at the European Central Bank (ECB) and the Organisation for Economic Co-operation and Development (OECD) to tackle pay again.

The government stood by the “Croke Park” deal last week when unveiling its budget for 2012 by instead finding 3.8 billion euros (US$5 billion) of savings through hiking taxes and cutting spending in areas such as health, education and social welfare.

The new measures saw Dublin pass the halfway mark of an unprecedented eight years of planned austerity. It will still have to find savings of 8.6 billion euros in its next three budgets if it is to shrink its budget deficit to the EU limit of 3 percent of gross domestic product by 2015.

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