IMF could take over and "order" mass dismissal of public servants

[DaveM]

See who the PSEU represents, that very same shower of Pr*cks who will actually be involved in the decision making process (Namely Senior Management). Hennessey never qualified that.

Actually he did.

Public sector union warns of industrial strife - The Irish Times - Tue, Jan 13, 2009

The PSEU represents 10,000 executive, higher executive and administrative officer grades in the public service, Eircom, Fás, Pensions Board and elsewhere.

[Halo]

According to todays Irish Times the spectre of the IMF taking over the economy has rared it's ugly head with a Union Cheif outlining the possibility to the trade unions.

Government set to tell unions of huge cuts in public pay bill
MARK HENNESSY, Political Correspondent

THE MAJORITY of the €2 billion that must be cut from exchequer spending this year will have to come from pay cuts for civil and public servants, unions will be told by the Government next week.

Meanwhile, a public service union leader has warned members that the International Monetary Fund could be brought in if the Government cannot cut borrowing and bring the State’s finances back under control.

“The IMF’s normal prescription in such situations involves mass dismissals from the public service (without compensation) and pay cuts for the remainder, along with cuts in pensions,” said Public Service Executive Union general secretary Dan Murphy.

He warned that pay cuts would provoke industrial action but said unions would be “constructive provided no unilateral actions are taken that would render our co-operation impossible”.

Up to now, there has been some doubt about how much of the €2 billion savings required by the Government could be generated by cutbacks in services and how much would have to come from the State’s pay bill. However, sources close to Minister for Finance Brian Lenihan made it clear last night that a “substantial portion” of savings would have to come from pay.

Given that low-paid public sector workers will have to be exempted, the Minister is determined to seek pay cuts from the rest of significantly more than 5 per cent.

The tough line comes in the wake of a chorus of warnings from union leaders that pay cuts would provoke serious industrial difficulties, up to and including strikes.

A memorandum to the Cabinet has yet to be prepared by Mr Lenihan, and a final pay cuts figure has yet to be decided, but he appears ready now to demand major sacrifices in talks next week with the social partners.

Taoiseach Brian Cowen and the Minister will be together for face-to-face negotiations with unions, employers and others once Mr Cowen has returned from leading a trade mission to Japan.

Today Mr Lenihan will outline the exchequer’s difficulties to voluntary and social groups. The Cabinet is to hold meetings next week to identify savings but Ministers do not believe that major service cutbacks can produce hundreds of millions worth of savings by year’s end.

The review of all spending by an expert group, widely referred to as An Bord Snip Nua, will feed into the preparation of the December budget rather than drive the cuts needed immediately.

Meanwhile, the Green Party has proposed that some Ministers of State should be fired to cut costs, while the expenses deal enjoyed by TDs and Senators should be overhauled, including a major cut in mileage rates.

Senator Dan Boyle said “a sense of political realism” was needed given the scale of the country’s economic woes.

Irish Times




Oh dear, I see the letters I , M and F are being mentioned. Very serious.

Yes but all this is written in relation to a bad fiscal deficit. With all these public sector talks we seem to have forgotten the most serious issue facing the irish state at the moment, the banks and were the money is going to come from to save them.

The bad loans to the builders to buy lands has already bankrupted the banks.
If unemployment continues upwards to 20% we will see massive defaults on residential mortgages coupled in with more bad debts to credit cards, business's etc. It could lead to property decline from its peak of 80% or 90%. for yous optimists out there remember that the japs and the swedes had a property decline of over 80% from its peak when their bubble burst and by all accounts our bubble is even more ridiculous.

Giving that the loan book is over 400million and half of the loan book was issued after 2006 we area sure bet for the IMF sometime around late 2010 barring a collapse in the euro and massive inflation which in these times cant be ruled out, hardly a saving grace though.

On the 2 billion cuts, they are fart in the wind.

Giving that the government is estimating negative growth of 4% for next. This is way off as bad as the last budget. it will be closer to 10% of negative growth. Another grave error by these bandits, one after another but this will be the straw...

I just read earlier that the state is expected to lose 1 billion in revenue to the north next year, half of the cuts in one small incident. Never mind our manufacturing base has become uncompetitive, our social welfare payments are the some of the highest in the world, people are leaving the country everything points to massive deflationary decline in times we, government and individual have massive amounts of debts.

Look my point is that i believe the cuts to be no more than token gesture to world financial markets and the government desperately trying to portray to their own people that they are under control.
The end result being that they will just prolong the inevitable which is sovereign default in my opinion and at least now ff can say they tried and faced down the unions etc etc when the imf or whoever does comes a calling

[planetX]

I think the IMF are more likely to take over the running of the UK, They have record amounts of national debt that makes Ireland`s look like small change.

[Kevin Doyle]

Actually he did.

Public sector union warns of industrial strife - The Irish Times - Tue, Jan 13, 2009

Apologies to Mr Hennessy in that regard, I read the OP, I assumed it was the piece in total.

Never the less, and as stated, Mr Hennessys opinions on this matter are well known.

As for Dan Murphy he appears to be contradicting himself by both scaremongering about the IMF if cuts are not introduced whilst threatening industrial action if they are.

A curious statement from him to say the least.

[Halo]

I think the IMF are more likely to take over the running of the UK, They have record amounts of national debt that makes Ireland`s look like small change.

that could well be the case and it would also back up a point made by a poster here earlier that the IMF could run out of money!

the way i see it

Its either lets all the banks and the financial institutions collapse, that will mean our savings as well and another 10 years of economic hell after

Massive inflation, maybe even hyper, which will erode our savings but would also erode our debt. 5 years of complete hell proportionally worst than the above scenario, and im not just talking about the printing presses!

By all signs at the minute the euro, sterling and dollar is getting itself ready for the latter!!

[smitchy2]

Ideally to head towards parity, I would of thought €2bn will be needed from payroll expenditure and €2bn from service cuts. With additional tax increases of €3-4bn.
The rest will be borrowed- €10-12bn.

However with union resistance and political flapping- none of this will be done soon enough.
IMF involvement will become a possibility if we cannot refinance our current borrowings with bond runs this year- €6bn got off the table last week (albeit at a very high interest rate).
As we have seen from this government though it is always a few months behind reality with their actions.

[DaveM]

Apologies to Mr Hennessy in that regard, I read the OP, I assumed it was the piece in total.

Never the less, and as stated, Mr Hennessys opinions on this matter are well known.

As for Dan Murphy he appears to be contradicting himself by both scaremongering about the IMF if cuts are not introduced whilst threatening industrial action if they are.

A curious statement from him to say the least.

Perhaps, but maybe he is just hinting at what a lot of union leaders know but won't say, i.e. the government are in a position of greater strength on this issue.

For industrial action to be successful a critical of public support for those taking the action is required. At a time when so many are facing hard times that critical mass is simply not there. As such the greatest political capital would be accrued by the government in facing down those taking the action, so the government has the motivation it needs. There's a big difference between threatening action and taking it. And if the unions decide to go that way they're at a massive disadvantage on the PR front, i.e. it could easily be portrayed as striking to protect a position of privalege while all others suffer. Obviously it's not as simplistic as that but that's the way it could easily be portrayed and fighting that image would be like trying to swim through treacle.

[Kevin Doyle]

Ideally to head towards parity, I would of thought €2bn will be needed from payroll expenditure and €2bn from service cuts. With additional tax increases of €3-4bn.
The rest will be borrowed- €10-12bn.

However with union resistance and political flapping- none of this will be done soon enough.
IMF involvement will become a possibility if we cannot refinance our current borrowings with bond runs this year- €6bn got off the table last week (albeit at a very high interest rate).
As we have seen from this government though it is always a few months behind reality with their actions.

The IMF is on the verge of collapse, it may find itself having to ask Governments for financial intervention. We will then see the ridiculous scenario of Governments borrowing from an institution that has heavily borrowed from them. I suspect more than a few Governments will reject a call from the IMF for a cash injection leaving it destitute and effectively out of business.

In these extraordinary times we may see a number of Governments pooling their resources in other ways with the distinct intention of dumping the IMFs failed neo-liberal policies on its arse.

It’s simply more of the same failed thinking applied to a growing financial catch 22 that was fabricated on that failed thinking in the first place.

[adrem]

I agree - there is no significant liklihood of an IMF takeover. Ultimately we all know that the cuts in expenditure will happen. There will be public sector pay cuts and there will be public sector redundancies / retirements. To paraphrase a comment made in a different context - the only thing remarkable about the positions being adopted is how unremarkable they are - they reflect the standard positions that one would expect each side to adopt in these circumstances.

Of course the govt is taking it slowly, talking to the social partners, etc whilst stressing the urgency and need for substantial changes. Of course the unions are saying no to pay custsand of course the ISME/IBEC representatives are saying no to corporate tax burden increase.

At the end of the day there will be tax rises for the higher paid (yes over and above the levy) - I would think that pension reliefs will be narrowed to include employer contributions in the new 150k cap (it's a technical point but basically it would reduce the amount of pension that would qualify for tax reliefs but would do so in a way that only hits high paid executives), there will be pay cuts for the public sector employees, I expect that there will be some form of property tax / rates introduced (with big exemptions for low paid), there will also be a stimulus package of school building, infrastructure etc.

There will be a substantial restructuring of the Health, Education and Banking and Financial Regulatory systems - the first 2 to cut costs and streamline them for the future, the third and 4th because they are woeful at the moment !

Of course the unions will jump up and down, and so will the employers but both know that realistically this has to happen, it's not the first time and it is the only way we will get ourselves out of this. The oppositions approach will be interesting - FG have already been calling for a lot of what is now anticipated - do they stick to their guns and call it their ideas being implemented by the govt or will they change tack and start opposing their implementation?

[Kevin Doyle]

Perhaps, but maybe he is just hinting at what a lot of union leaders know but won't say, i.e. the government are in a position of greater strength on this issue.

For industrial action to be successful a critical of public support for those taking the action is required. At a time when so many are facing hard times that critical mass is simply not there. As such the greatest political capital would be accrued by the government in facing down those taking the action, so the government has the motivation it needs. There's a big difference between threatening action and taking it. And if the unions decide to go that way they're at a massive disadvantage on the PR front, i.e. it could easily be portrayed as striking to protect a position of privalege while all others suffer. Obviously it's not as simplistic as that but that's the way it could easily be portrayed and fighting that image would be like trying to swim through treacle.

I think you are hugely underestimating the impact of a General Strike (that’s an all out Strike that will effectively shut the country down). It would topple the Government and well they know it.

The point most people are missing here is that Public Sector Workers are sick to their back teeth of the relentless baseless tripe being flung at them in the media. PR is irrelevant. There is no appetite amongst the electorate for a serious of disastrous face downs with Unions who they know had nothing to do with the recession.

I suspect the Government is hoping for a collapse of Partnership so as to prevent any unified action taken by Unions, a strong indicator that Government cuts will be targeted instead of across the board.

The HSE and Education is about to get it in the neck.