Given that pay restraint has been central to Ireland's economic success, there are fears that the latest wage deal could increase inflationary pressures and further worries about the economy over heating.
The broad parameters of the deal already negotiated are certainly more generous than those of previous agreements. However, given the sharp rise in corporate profits and labour shortages, this was probably the only realistic available outcome.
This State already comfortably tops the inflation league within the EU, with inflation running at 3.4 per cent at the end of 1999. There are worries that any further boost could cause the economy to overheat seriously.
With soaring house prices, labour shortages and congestion, it is hardly surprising there is a fear that it could all come crashing down. But it is still very difficult to see what would bring about such an outcome.
Thus far it appears that the combination of the national minimum wage, tax concessions and gain-sharing is likely to add 10 per cent to the average net disposable income of a PAYE worker this year.
For many this is a price well worth paying for continuing social consensus, a relatively peaceful industrial relations environment and some medium-term certainty for both workers and employers.
The pay element is broadly in line with assumptions in the ESRI's latest Medium Term Review, in which it estimated that the economy could continue growing at around 5 per cent a year.
It can be argued that the general-round increases of 15 per cent over three years are simply implementing what has been on offer in the marketplace in the last year.
Wage rises in manufacturing, services and construction have all been around five 5 or 6 per cent, so this agreement is simply pitching the rate where the market has already brought it. To do otherwise could be to risk failure.
Of course, the deal has not yet been finalised, and there will be some impact from any additional tax concessions over the next few Budgets, as well as from local bargaining or, more probably, gain-sharing agreements to come later this week.
In itself the deal is unlikely to add very much to the consumer price index. According to Mr Dermot O'Brien, chief economist at NCB Stockbrokers, wage rises are much more likely to affect the profitability of individual companies than to feed through to inflation.
Because of the strong competitive forces operating in the economy, few will be able to pass on large cost increases due to pay rises.
However, the services component of the index is already running at about 5 per cent, and that is likely to continue. Thus the price of services from creches to hairdressers and from tradesmen to restaurants and travel is likely to continue rising more rapidly than general consumer prices.
At the same time - as Prof Brendan Walsh at UCD has argued - rising wage levels will act to reduce competitiveness and thus act as a welcome brake on the economy. After all, the State has lost control of some of the most powerful means of macro-economic management in recent years.
There is no doubt that if the Central Bank still had autonomy over Irish interest rates they would be a good deal higher, perhaps even more than double what they are now. The other method of control is traditionally fiscal - or tax-and-spending - policy.
However, the latest Budget is the most generous in history, with more than £1 billion wiped off the tax bill in just one year. This, according to the ESRI research professor, Mr John FitzGerald, was excessively stimulatory. Thus rising wages could be one of the only functional tools left to slow the economy.
Simply, if wages are going up by 5 per cent in Ireland and 3 per cent across Europe, this State will lose competitiveness within the euro zone.
The traditional way of measuring competitiveness is to compare earnings growth with productivity growth. Depending on how it is measured, productivity has averaged between 3 per cent and 4 per cent over almost the past three decades.
Last year it was towards the bottom end of that range. With average inflation running at around 2 per cent, a 5 per cent wage increase - particularly in an environment where labour is scarce - certainly makes sense.
THE TAX element of the package may be a different matter, and it is this which particularly worries Prof FitzGerald. He argues that the latest Budget was far too stimulatory and that the next ought to tighten taxes, at least at the margins.
The danger, he says, is that tax cuts tend to feed into rapid wage rises without any loss of company competitiveness, which then rapidly feeds into rising asset prices. Thus tax cuts are far more likely to feed into rising house prices than are wage rises.
Of course, the reality of this is likely to be different for individuals and companies across the State. Averages, by definition, hide all sorts of differences.
While unemployment fell dramatically last year, there were also more job losses than in most recent years. Already traditional, indigenous manufacturing industry is being squeezed. There is little room for it in the new Ireland, and that is likely to continue.
Undoubtedly some companies will not be able to afford the pay settlements agreed this week. If those companies are also affected by the currency problems, for instance, it could mean more job losses.
The key will be maintaining the momentum in job-creation and retraining and reskilling people.