Trade union leaders and senior Government officials meet today to discuss ways of curbing inflation and protecting increases in living standards negotiated under the Programme for Prosperity and Fairness. The Irish Congress of Trade Unions (ICTU) will come under intense pressure to call a special delegate conference to review its involvement in the PPF if no tangible measures emerge.
"The message we'll be giving when we get in there is, whatever options are available, doing nothing is not one of them," IMPACT general secretary Mr Peter McLoone said yesterday. As leader of the State's largest public service union, he was one of the strongest advocates of the PPF.
He accepts that finding the right formula to tackle inflation "will not be easy, but the alternative is a wage-price spiral". There was now a need for the social partners "to protect the agreement itself".
The general secretary of ICTU, Mr Peter Cassells, was critical of the non-interventionist approach of the Minister for Finance, Mr McCreevy, so far. The Minister's "recent sermon on the domestic factors driving inflation, especially wages, did not go down well, especially coming on the heels of his casual revision of inflation figure upwards".
He said workers' "confidence in the PPF's ability to improve living standards will be quickly eroded by current inflation levels unless the Government takes practical measures". He suggested that cuts in duties on fuel, already suggested by Congress, was one way this could be done. Workers and pensioners could also be compensated in the next budget for cost-of-living increases.
"We have made it clear in relation to the PPF that the benefits have to be shared fairly. If that doesn't happen, those in the trade union leadership who sold the deal will be the first to call for withdrawal from the agreement," he said.
"I hope it doesn't come to that and there is no reason why it should. We will know after Friday's meeting how seriously they take the situation and what they intend doing about it."
SIPTU president Mr Des Geraghty described today's meeting as "critically important. We need a declaration of intent from the Government that they are going to manage the problem". The exchange rate between the dollar and the euro was "coming right", but Mr Geraghty said "we can't accept a situation where the Minister for Finance and the Department of Finance sit back and refuse to tackle domestic factors".
Besides the price of housing, he said there was growing evidence that sectors such as professional services were taking excessive profits. If necessary, price controls should be used to prevent people "departing from national norms".
Today's meeting will be with the secretary general to the Government, Mr Dermot McCarthy, and with the secretary general of the Department of Finance, Mr John Hurley. It is likely to be the first of a number of such meetings with early referral of issues, if necessary, to the Taoiseach, Mr Ahern, and Mr McCreevy.
Mr McCarthy and Mr Hurley are likely to remind union leaders that even with inflation exceeding 4 per cent, net increases in take-home pay for the average PAYE worker are likely to be in the region of 8.5 per cent this year. This would be hard to match in a free for all, where wage claims might end up being clawed back in tax.
