There was no alternative to Partnership 2000, the Taoiseach, Mr Ahern, told the social partners at yesterday's review of the deal in Dublin Castle. Any attempt to destabilise it by "leap-frogging" pay claims in the public service would endanger the record growth of the past decade.
Mr Ahern held out the prospect of "a fundamental look at how pay bargaining and pay management are approached in the public service beyond Partnership 2000". However, any increases would have to reflect more closely the productivity and performance of workers involved.
He said there were inflationary pressures in the economy which would have to be addressed. He anticipated some form of price monitoring rather than a return to price controls.
In a spirited defence of social partnership yesterday, Mr Ahern said there was "a striking ignorance" of how the State had performed over recent years by some commentators who were predicting the collapse of Partnership 2000. Real take-home pay had increased by over 10 per cent for those on the average industrial wage, and there were 215,000 more people at work than five years ago.
He said the current budget surplus of £604 million in 1997 compared to a deficit of £1.4 billion in 1986. Unemployment had almost halved. The economy was growing almost three times as fast as the EU average, and more than twice as fast as the OECD average.
"All these achievements, however, did not come about by accident. The simple fact is that we, together, worked to achieve it. We recognised that our future could only be secured by acting together in this small community.
"I don't believe, as some have suggested, that this social partnership of ours can only work in times of crisis. I don't accept that, having created a process which is the envy of the rest of Europe, we would be so foolish as to let it unravel before our eyes."
He accepted there were problems and a "need to learn a new way of doing our business. The stresses and strains which we face are increasingly those of a successful economy."
However, he predicted that, given the age structure of the population, "the next 20 years could be a golden period in Irish history". To achieve this we had to build a fair and inclusive society.
"That is not just a matter of social conscience: the reality is that economic strategies are sustainable only when they command the support of the community. That support will only be forthcoming if we are seen to apply our resources, our ingenuity and our commitment to tackling the continuing reality of social exclusion."
He said the alternative was to risk "an increasingly divided society".
He acknowledged the need to focus tax reform to benefit "middle to low earners". He said there was "a substantial case for looking at how our industrial relations machinery might be renewed to accommodate better the challenges of the changing world of work".
The Minister for Finance, Mr McCreevy, warned the social partners that rising expectations meant "we are now at the precipice, and it is about time we all levelled with one another".
"A new spiral of public service pay increases would pre-empt resources which might otherwise be used to improve the potential growth of the economy and to combat social exclusion, leave less for tax reductions, add to inflationary pressures and undermine competitiveness.'
While he defended the terms of the Garda pay offer, he also pointed out that it was not negotiated under Partnership 2000.
The Tanaiste, Ms Harney, said public service workers were entitled to share in the current economic boom but not at the expense of workers "in the exposed sector of the economy" and the marginalised.
Like the Taoiseach, she signalled tax reductions for the low-paid and said the national minimum wage commitments would be honoured.