Irish Workers Stage Biggest Strike in 30 Years

Irish Workers Stage Biggest Strike in 30 Years

 

By Colm Heatley and Ian Guider

Bloomberg

November 24, 2009

 

http://www.bloomberg.com/apps/news?pid=20601085&sid=aIpZJw1g7TZA

 

Irish government employees are staging the biggest strike in at least three decades today, with about 250,000 workers protesting against plans to cut pay to contain the budget deficit.

 

Nurses, teachers and tax officials are among those taking part in the 24-hour nationwide stoppage over what labor unions have said are "vicious" cost-cutting plans by the government. Union officials have threatened further strikes if talks with the government on an alternative savings plan fail.

 

Ireland, once Europe's most dynamic economy, has been hit by a property crash and the global recession, eroding tax income and pushing the shortfall to 26 billion euros ($38.9 billion) this year. Finance Minister Brian Lenihan wants to cut about 4 billion euros from spending in the Dec. 9 budget to rebuild investors' confidence after borrowing costs soared.

 

"Strikes will send the wrong signals," said Alan McQuaid, chief economist with Bloxham Stockbrokers in Dublin. "If the international market sees the government standing up, they will see it as a good thing. There is a steely determination on the part of the government to do the right thing."

 

Ratings

 

Ireland has already raised taxes and imposed a levy on public workers as it grapples with a deficit amounting to about 12 percent of gross domestic product.

 

While difference in yield, or spread, between 10-year Irish securities and 10-year German bunds narrowed to as low as 136 basis points earlier this month from 284 basis points in March, it has since widened to 151 basis points.

 

"Markets are watching very closely all developments in relation to the Irish public finances," Deirdre Ryan, an economist at Goodbody Stockbrokers in Dublin, wrote in a note today. Government assurances "that the necessary cuts will be implemented in spite of protests are very welcome."

 

The stoppage has been partially scaled back due to flooding in the south and west of the country after heavy rainfall. Hospitals and emergency service workers will maintain services in those areas. The strike today will still close social welfare offices, passport offices and the public offices of the state tax authorities.

 

Shay Cody, deputy general secretary at the Impact trade union, said that while officials will resume talks with the government, if there is no agreement, "inevitably there will be further action."

 

Placards

 

"Government seems to be taking out a large part of its anger on public servants," said Colm de Burca, a translator at the Irish parliament, as he protested at the picket line. "There are a lot of people who are on very good salaries in the private sector, but they are not being touched for some reason."

 

Some picketers criticized the amount injected by the government into Ireland's biggest banks, with placards saying `7 Billion-Euro Bailout for Banks.'

 

The government said this month that the deficit will hit 14 percent of GDP next year, almost five times the European Union limit, unless it takes action. It sees the economy, which doubled in size in the decade through 2007, shrinking 1.5 percent in 2010 after a 7.5 percent contraction this year.

 

Last Updated: November 24, 2009 10:12 EST

 

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