National pay talks - Impasse may put economy in danger

THE outlook for the long-term success of the national pay talks is bleak given the crisis mood hanging over yesterday’s make-or-break session of negotiations.

Taoiseach Bertie Ahern gave an early warning that considerable differences remained between the social partners on the questions of pay and related non-pay issues.

Meanwhile, the OECD warned that pay increases should be in line with productivity developments.

If the talks come to naught, it could spell disaster for the economy. Arguably, we could see a return to a free-for-all scenario with companies deluged by pay claims in a rash of collective bargaining.

Ominously, if a deal is not clinched, the hard-won package of worker rights, including 60 additional labour inspectors, plus heavier penalties for breaches of labour laws, may also be lost. Nationally, the knock-on implications for the economy could be catastrophic because pay agreements have provided a buffer against the bad days of industrial strife.