Social Pacts in Ireland
Since 1987
Background
Irish economy was in crisis in the late 1980s: the unemployment rate was 17% and inflation was running at an average of about 12% in the decade until 1987. Public finances also were problematic with budget deficits of more than 8% of GDP and a national debt/GDP ratio mounting to 125% in 1987. Tax rates soared in an attempt to pay off the large public debt, depressing the economy further. With the lack of employment opportunities and decreasing real wages, emigration was at its highest level since the 1950s.
The sense of national crisis brought about a concerted search for tackling the problem of stagnation, soaring debt and taxes. The social partners and government gathered and discussed some practical steps to deal with this serious challenge to the Irish economy and society.
The National Economic and Social Council (NESC) produced a report on Strategy for Development, which set out the key principles to be applied in regenerating the economy and society. With theleadership of trade unions, employers and the government, negotiations commenced in October 1987 resulting in the first social pact, the Programme for National Recovery (PNR).
Successive Social Pacts
The pattern of negotiation applied in the PNR has been followed in successive pacts. A report by the NESC evaluates past experience and lessons, and provides focus and direction for subsequent negotiations. Social pacts not only set out the strategy and target for wages, working conditions and social security, but also set out guidelines for implementation. They provide a mechanism for monitoring implementation and evaluation of the programmes. For this function, the Central Review Committee (CRC) was established in the PNR, which included representatives of the Government and the social partners. The CRC is supplemented by a number of working groups as well as more informal contacts between Government and the social partners. Successive social pacts have managed to broaden stakeholders involved in the negotiation as well as the focus of agreements: from initial crisis management to a more comprehensive approach coping with challenges related to economic and social progress as well as social exclusion.
It is widely acknowledged that the Irish social pacts have been successful and are the key vehicle for its economic and social success since the 1990s.
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