UNIONS have hit out at the rising cost of the bank bailout, suggesting it will inflict further damage on the economy.
Reacting to news that the cost of the bailout could rise to above €40 billion, union leaders suggested the Government is being forced to intensify its cutback agenda as a result.
ICTU president Jack O’Connor denounced as “absurd” the fact that the Government intend to make an adjustment of over €3bn in cuts and tax raises in Budget 2011.
Mr O’Connor said persuading people to spend again is the key to jobs.
“A pay freeze across the economy would serve only to further depress consumption, especially at a time when the Government is insisting on continuing with its absurd policy of taking another enormous amount out of the economy.”
ICTU general secretary David Begg also criticised the Government’s deflationary strategy saying the reduction of the deficit to under 3% of GDP was not possible by 2014 due to the damage such cuts would inflict on “economic recovery”.
However, trade sources were adamant they expected the Government to honour the Croke Park deal on public sector reform agreed in April.
One trade union source said commitments have been given of no further pay cuts and that management will work with unions and staff to maintain services through efficiencies and flexibilities.
Reacting to news yesterday that IBEC had called for a private sector pay freeze until 2013, Mr O’Connor suggested such a move would be completely counter-productive.
“Apart from anything else, it fuels the fear and apprehension which is preventing people from spending.”
Speaking on behalf of the ICTU private sector committee which represents 400,000 workers TEEU leader Eamon Devoy said a unilateral call for a pay freeze by IBEC was a recipe for conflict.
“Far from helping our economic recovery it will undermine it further.”
Union leaders are considering plans for major mobilisations in support of ICTU budget proposals that will centre on enacting an economic stimulus plan in order to create jobs.
Union figures warned at protests held on Tuesday that a Government failure to change economic direction and place job creation as the top priority, rather than the saving of the banks, would lead to major industrial conflict and immediate calls for a general election.
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