“There are always cards to be played”….in political bargaining

Such were the words of Joe O’Toole on ‘The Week in Politics’ when it was put to him that there is little to be exchanged between the government and the trade unions in a new ‘partnership’ deal. He went on to argue that a deal can be done between the social partners. But, only under certain conditions.  It is the difference in these conditions that illustrate how a national agreement could be reached in 1987 but not in 2009.

It is the way government of the state integrate political interests of societal stakeholders (labour and capital) into decision making (around crisis) that explains the variation of social pacts. Tripartite agreement requires expanding the deal into socio-economic policies that mediate the impact of public expenditure cuts. Three key policy areas to consider are a) industrial relations, b) social policy and c) the labour market.

This comparative difference can be captured by observing government strategy in both 1987 and 2009. For a problem solving approach to work the governing rules of the game have to be agreed upon (reducing debt-GNP in late 80’s). Taxation and wage restraint were the two key variables in 1987. Trading one for the other is more difficult now, as there are no taxes to be decreased.  Furthermore, given that both actors do not agree upon how to handle the economic crisis (in both banking and the public finances) bargaining over policy areas much more difficult.

The banking crisis, and the priority accorded to it ,is a key difference between the crisis of early 80’s and 2009. The government have ploughed ahead with key strategic decisions that required some level of input by the trade unions from the beginning if a shared analysis was to be created.  Social dialgoue is a central pre-requisite for social pacting (policy agreement). This dialogue in a time of crisis has to be more than mere consultation if serious agreement can be reached.  Both the trade unions and government appear to be taking more of a unilateral and adversarial approach when compared to 1987. But, again, the political economic conditions differ. In 1987, the New-Right were gaining political priority. Today, there is a strategic shift away from political drive toward de-regulation.

Whether a deal can be done in 2009 given the different policy, economic and institutional differences to 1987 is hard to call. A call for pay increases may seem unrealistic on behalf of SIPTU given the fact that the government are borrowing €400m a week just to cover existing costs. But it is also unrealistic to expect trade unions to agree to a 4bn cut in expenditure on public services (and public sector pay) whilst putting €10 bn into a property developers bank.

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