Ruth Irish minister backs revision of deal with unions

Reuters News

9/10/2012 6:49:32 AM - Reuters News

DUBLIN (Reuters) - A senior Irish Labor Party minister has backed the overhaul of a deal with unions that has been widely credited with helping the country turn around its sovereign debt crisis.

Ireland's public sector unions signed up to the "Croke Park" agreement in March 2010 under which the government pledged not to cut pay and avoid layoffs as long as unions agreed to voluntary redundancies and working longer hours.

But energy minister Pat Rabbitte told state broadcaster RTE on Monday he would support any move to reopen the public sector pay deal after calls from politicians and business groups for discussions to begin before the agreement ends in 2014.

The Irish government, a coalition of Fine Gael and Labor, may be forced to break the agreement by cutting public sector wages if spending targets under its EU/IMF bailout are to be met, the health minister said last month.

Fine Gael members of parliament have criticized the Croke Park deal, which protects much of Labor's public sector support base.

The deal is credited with avoiding the kind of industrial action that has held back fellow bailout recipient Greece, enabling Ireland to make greater progress than any other troubled euro zone debtor in reviving its economy despite deep budget cuts.

"If the government were to decide to introduce new issues into the Croke Park discussions in the coming weeks, I would support that," Rabbitte told RTE on Monday, in comments echoing those of other senior government ministers and industry groups.

The senior Labor politician said he would support talks to consider new issues and "look at the overall economic situation ... and the fact that in order to be compliant with our targets, we have to bring in what will be a difficult budget in December".

Workers took wage cuts averaging 15 percent before the agreement was struck, promising no cuts in basic pay in exchange for reform of working practices.

"We can talk about renegotiation before it expires. The current agreement stands, until 2014. If we're going to negotiate an extension, it needs to start now," Transport Minister Leo Varadkar told RTE on Sunday.

The Irish Business and Employers Confederation (IBEC) also called for a renegotiation, saying the Croke Park agreement, is "not fit for purpose" in the current economic climate.

(Reporting by Lorraine Turner; Editing by Ruth Pitchford)