The Irish Congress of Trade Unions (Ictu) has said that it would not listen to calls for a pay pause in the public service.
Employer's group Ibec yesterday called for the introduction of a pay pause for public service employees in the wake of a report published by the Economic and Social Research Institute (ESRI) which warned the country was slipping into recession.
Ictu General Secretary David Begg said today there was no public appetite for pay restraint and there were whole groups of people who had "their snouts so deep in the trough for so long" that unions could not sell such a message even if it was the right thing to do.
Mr Begg said the public servants already have had to deal with a pay pause in the current agreement as well as a small reduction in wages as a result of higher inflation.
In a position paper on inflation and pay, Ictu said that a new pay freeze would further erode consumer confidence and reduce domestic demand and prolong the inflation.
Mr Begg said this evening it was “no coincidence that all this bad news was emerging in the middle of these pay negotiations”.
In an article for
The Irish Timesin the wake of the ESRI forecast, Ibec director of policy Danny McCoy said the increase in unemployment was already giving rise to a greater degree of wage restraint in the private sector through market forces.
"This pay restraint must also be reflected in the job-secure public sector. The private sector will not be prepared to pay for higher public-sector pay growth by the loss of their jobs or businesses. The rapid deterioration in the public finances has to be addressed. The only way of doing this, while sustaining Ireland's long-term prosperity, is by reining in current expenditure growth, whilst preserving much of the capital expenditure committed under the National Development Plan", he said.
Taoiseach Brian Cowen has urged unions to exercise restraint in the current round of pay talks. Responding to questions from Opposition leaders in the Dáil yesterday, the Taoiseach accepted economic growth this year would fall short of the predictions made a few months ago and action would have to be taken.
The ESRI said that an end to Ireland's decade-long property boom and slowing consumption would lead to a 0.4 percent fall in gross national product this year after 4.5 per cent rise in 2007 and predicted Ireland would have its first recession since 1983.
It also said the general Government balance would show a deficit of 2.8 per cent of GDP this year after a 0.3 per cent surplus in 2007 and worsen to a 3.9 per cent deficit in 2009.
Mr Cowen said that dealing with a lower-than-expected growth rate was a challenge, but he added that the Government would deal with it on the basis of taking the correct course now so that growth in the economy could resume when the upturn came.
While Mr Lenihan refused to be drawn on whether the Government would consider a public-sector wage freeze, he said in a television interview that there would be discussion with the social partners about the difficulties facing the country that everybody would have to reflect on.