The phrase "managing economic success" recurred during the Partnership 2000 review meeting this week between the Government and the social partners. It is an appropriate means of identifying the issues involved. From the Government's point of view there is a need to counter knock-on increases in the public service in the middle of a period of unprecedented economic growth which has seen a surge in corporate profitability and inflationary pressures. All of these factors are amply documented in yesterday's Annual Review and Outlook from the Department of Finance. The agreement expires in March 2000 for private workers and later for those in the public service - a timetable which will necessitate intensive negotiations on a successor deal next year. Within this perspective, Tuesday's meeting must be counted a short-term success for the Government. The review process is to be reconvened in the autumn. Further discussions will take place amidst widespread expectations that the next Budget will contain substantial tax concessions for the lower and middle paid sectors. These would lay the basis for detailed talks next year on a successor deal. They would also optimise the developing political and trade-union peer pressure on teachers and other groups of public service workers wishing to build on concessions to nurses and the Garda to hold off until the next - and presumably more flexible - national round.
All concerned must bear in mind two cardinal facts about Ireland's recent economic success. Partnership deals have been crucial in setting the framework for the significant growth in real personal disposable incomes and addressing issues of social cohesion and welfare, as the Taoiseach, Mr Ahern argued convincingly in his presentation to the meeting. But, secondly, their very success has fuelled inequalities in Irish society - exacerbated, it must be said, by inappropriate tax concessions to the best off in last year's Budget. Prosperity, poverty and welfare are all relative concepts in this society. Growth on such a scale has inevitably widened real divisions as well as public perceptions of them. It has also tilted the balance of power within the industrial-relations system towards those such as construction workers effectively operating in conditions of full employment; to certain public service unions which have benefited disproportionately; and now to younger groups of workers who do not remember the dire privations of the 1980s which form the essential background to a decade of partnership. It will take political skills of a high order to manage this economic success effectively in coming months and years in such a way as to preserve the very conditions which gave rise to it and seem to guarantee its continuation. The Government must deliver tax and welfare concessions written into Partnership 2000, despite warnings from the European Commission and the European Central Bank about the need to reduce debt and avoid inflationary pressures. If these concessions are properly targeted, inflation can be minimised; and there is much to be said for the argument that the relative wage stability delivered by national agreements outweighs inflationary risks in importance. But it will be impossible to strike such a deal if knock-on claims for teachers and other public-service groups are allowed to proceed on foot of settlement of the Garda pay claim.