Irish social partnership, often cited in Croatia as a desirable social framework for development, has been put to severe tests by the crisis. Hearing that the proposed state budget for 2010 anticipates a reduction in public sector salaries, 300,000 employees in public services threatened to strike if the government persisted.
The strike is announced for today, and union leaders expect at least 250,000 people to participate. The financial crisis that has severely impacted Ireland has imposed on the government the need to patch budget holes while simultaneously preserving the international competitiveness of the Irish industry. Thus, the well-known Irish social partnership has become one of the major victims of the crisis. It has been shown that social harmony, partnership, and a culture of agreement among participants are easy to maintain in times when coffers are full, but when they are empty, ‘love easily flies out the window’.
According to the valid agreement between the government and the unions, which was concluded in October last year, public sector salaries were supposed to increase by 6 percent over the next 21 months, including an 11-month salary freeze, which the unions agreed to in exchange for the government’s promise that there would be no tax increases. However, the fiscal crisis has imposed on the government the need to borrow amounts of up to 12 percent of GDP this year and next, making the commitment to tax restraint difficult to achieve. A recent OECD study on the state of the Irish economy and finances assessed the situation such that ‘there are good reasons to abandon the existing framework of social partnership and to find other ways for dialogue between social partners’.
