Partnership may need rejig - ESRI

The Republic's partnership process may have to be "re-jigged" in coming years if domestic economic growth is to be sustained, director of the Economic and Social Research Institute (ESRI), Mr Brendan Whelan, warned yesterday.

Before an address to the German-Irish Chamber of Industry and Commerce, Mr Whelan said Irish workers should "reflect on downward flexibility", suggesting future economic conditions may make promised pay rises impractical. In such circumstances, additional benefits could be awarded in forms other than wage payments, such as improved pension provision or gain sharing, Mr Whelan said.

He acknowledged, however, that any readjustment of the current partnership process could result in industrial unrest, describing the last 10 years as a "golden age" in industrial relations.

"When the dislocation happens, there'll be some element of that," he said, referring to potential union discontent.

On the debate over health spending, Mr Whelan said health funding needed to be "better managed and better targeted" and called on the Government "to spend a bit more money on it".

He later urged his audience to focus on the longer-term aspects of last week's ESRI Medium Term Review 2001-07, contending that media coverage of the research had focused excessively on short-term negativity.

He assured the gathering of German and Irish business people that the Republic's economy still rested on firm foundations and emphasised the medium-term predictions of 4.5 per cent growth made in the review.

Mr Whelan admitted that firm economic predictions had become more difficult than usual after September's US attacks.

For example, a counter-attack against Afghanistan could skew the picture significantly, he said.

"Undoubtedly, we will have a shock, but what its magnitude will be is an entirely different question," Mr Whelan said.