THE GOVERNMENT will have to show a willingness to offer a multi-billion euro plan to safeguard private worker pensions if social partnership talks this week are not to collapse, senior union figures have said.
The Government, trade unions and employers will meet on Wednesday to begin a new round of social partnership talks, which were abandoned just days before the emergency Budget.
However, the leader of the country’s largest trade union has signalled a willingness – however reluctantly – to tolerate the buy-out of failed bank loans if the Government moved on the pensions question, and on a number of other issues.
Siptu general secretary Jack O’Connor said yesterday that the creation of the National Asset Management Agency by the Government to buy up to €90 billion worth of bank property loans is the taxpayers’ “nemesis”.
“It represents nothing less than the socialisation of the enormous risks generated by developers, banks and speculators in their reckless pursuit of profit,” he said, speaking in Limerick at a commemoration of the Limerick Soviet.
Meanwhile, The Irish Times understands the State-owned agency itself will not be in place for up to a year since legislation required to set it up – which is not yet even written – will not begin its passage through the Oireachtas until October at the earliest. The timetable is bound to raise difficulties in talks between the Department of Finance and the banks about the valuations they can put on their property loan book.
In a signal that he believes Nama is a reality, Mr O’Connor said Siptu still wanted the banks to be nationalised, but, he added: “It is now clear the Government will not be dissuaded from proceeding with the Nama.”
On pensions, Mr O’Connor said: “It is now clear that the defined benefit pension system is unsustainable and there is an urgent need to create a new universal pay-related pension paradigm. We envisage a PRSI-based, mandatory mechanism. We recognise that this can only be developed incrementally over time.
“However, we insist on an interim arrangement to address the crisis faced by union members who have paid for their pensions throughout their lives and who will receive little or nothing in the end.”
Mr O’Connor’s decision to set a May 1st deadline for the talks is more strongly toned than the feeling expressed by other union leaders at last Wednesday’s meeting of the executive of the Irish Congress of Trade Unions, according to sources spoken to yesterday.
However, Ictu general secretary David Begg is of the view that it will be clear within hours of Wednesday’s talks resumption if an agreement can be reached, even if the details take longer to work out.
Ireland’s failure to have a State-backed pension guarantee scheme is in breach of EU rules, say some unions, and it may be challenged in the European courts by former Waterford Wedgwood workers.
Employers’ organisation Ibec is understood to be sticking to its demand for a two-year pay freeze.
