Croke Park II - Hard to see how €1bn will be saved

It is difficult to see how the measures unions still involved in the Croke Park II talks have agreed to recommend to their members will save the necessary €300m in the next nine months — or €1bn before 2016.

Despite that caveat, and when deals involving public servants talking to public servants about pay and conditions are being considered there will always be some, it is far better that the process continues rather than collapse into the kind of industrial relations mayhem we can ill afford.

Pay cuts of 5.5% on income above €65,000, increasing in stages, to a 10% cut on income over €185,000, a reduction in Sunday payments from double time to 1.75 times normal pay and the deferral of some increments hardly seem radical impositions, even if considered in the light of earlier reductions — especially so if guarantees regarding no further pay cuts or redundancies are extended until 2016. Of course there are other measures under review, including the length of the working week, but first impressions suggest the fact that the deal runs out in what should be an election year has influenced if not softened the outcome. The option of surrendering time rather than cash for people who have reached the top of their incremental scale adds to that suspicion.

Indeed, when compared to some of the measures imposed in other parts of the economy it is very hard to imagine what kind of deal the four unions who quit the talks early yesterday had thought possible. The hard reality is that yesterday’s proposals seem a good deal for public sector workers when set in today’s broken economy and against appalling unemployment figures.

This is especially so as those on lower or moderate salaries remain largely unscathed — if that is an accurate description of someone earning €64,999. That the Irish Congress of Trade Unions said the deal would ensure public servants are less worse off than they might otherwise be confirms that impression.

However, unions or associations representing 80,000 public service staff have walked away from the process so it’s far too early to say if the deal will stick.

Taoiseach Enda Kenny has said Government will use legislation to impose cuts if agreement cannot be reached but it would be more than unfortunate if that became necessary. However, if that point is reached then Government has little or no wriggle room and it must persevere with the plan it has laid out.

Despite yesterday’s development the Croke Park arrangements still represent a fault line running through this society. That remains true no matter how loudly those involved in the process declare otherwise. It would be far easier — and reassuring — to offer an unambiguous welcome to yesterday’s events if independent oversight on the real savings and the real scale and pace of reform had been facilitated.

Nevertheless, as ICTU said in a slightly different context, it is probably better than the alternative but that can only be confirmed if, in 2016, it can be shown that real savings of €1bn have been made. That, as EU Commissioner Olli Rehn said in Dublin yesterday, is the real challenge.