Europe

Agreement on Irish austerity pay cuts, but will it stick?

2013 is a big year in the Irish trade union calendar.

It marks the centenary of the 1913 Great Lockout when union leaders like James Connolly and Jim Larkin fought for workers' rights against employers.

It was a period of great hardship.

And while nobody would compare conditions then with now there are some who believe that events of 100 years ago cast a shadow over the agreement reached between unions and the government.

Image caption There was industrial upheaval in 1913 with strikers and the authorities in Dublin clashing

This deal is aimed at cutting the cost of public service pay by 1bn euros, about £888m.

The Irish government is very keen to exit its EU-IMF bail-out programme at the end of the year, but there is still a big gap between the money it raises in taxes and the amount it spends on public services.

For that reason, and to win back and keep the trust of the markets, who will have to lend to Ireland, the Fine Gael-Labour coalition believes it has to make significant savings on its public sector wage bill.

The coalition had threatened to impose wage cuts by law if no deal was reached.

But on Monday morning, the two sides signed off on an agreement aimed at protecting those on lower pay.

The deal, if agreed by members, will run from July 2013 until 2016 and follows on from another Croke Park agreement on industrial pay and peace.

Wage cuts will start at 5.5% for staff earning more than 65,000 euros (£57,000) and rise to 10% for those earning 185,000 euros (£163,000).

Overtime rates will also be reduced.

Irish public servants are paid more than their counterparts in the United Kindgom, but taxes are higher as is the cost of living.

Those unions who have agreed to the deal will now have to ballot their members.

But not all the unions or representative bodies in the public sector have backed it.

Rally

Police, nurses, doctors and unions representing some civil servants walked out arguing that their pay has already been cut and that they cannot afford another reduction.

Last week, there was a big rally in Dublin by those involved in frontline services - involving the police, medics and firefighters - opposed to pay-cuts in any shape or form.

Many speakers recalled the history of the trade union movement, the events of 100 years ago, and strongly criticised the Labour party for attempting to oversee a deal that would cut workers' pay.

Others attacked the trade unions involved in the talks for taking part in a process aimed at reducing wages.

It is not yet clear whether the government will proceed to legislate for pay cuts for those who have not taken part in the talks.

No decision on anything as contentious as that is thought imminent.

But both government and unions know that while the agreement is a significant step there are many other hurdles that have to be crossed before we know whether the deal will stick.

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