THE STATE'S borrowing figures are unsustainable and must be cut or the International Monetary Fund will be brought in and will order the "mass dismissal" of thousands of State employees, a public service union leader has advised members.
However, in a letter to branch secretaries, Public Service Executive Union (PSEU) general secretary Dan Murphy said pay cuts for civil and public servants would not be acceptable.
He said the Government had not demanded pay cuts to date, but Taoiseach Brian Cowen had outlined the economic challenges at a meeting last Friday. "The economic situation is serious and, in particular, the exchequer position can only be described as parlous with a virtual collapse in tax revenue," said Mr Murphy.
"According to figures provided at the meeting, unless changes are made in taxes and/or expenditure, net current expenditure will come to €54.6 billion and tax revenue will come to €38.4 billion in 2011."
By 2011, the exchequer would be running a €15.5 billion deficit on the back of collecting €39 billion worth of taxes - a worse return than the Revenue Commissioners managed in 2005.
Mr Murphy continued: "This level of deficit is clearly unsustainable and would produce very serious effects since the Government would be unlikely to be able to continue borrowing at this rate, with the result that the financial administration of the country would, effectively, be taken over by the International Monetary Fund, and their 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 etc.
"It is, therefore, very much in the interests of our members that a solution is found to this crisis which can avoid such a situation developing."
The PSEU represents 10,000 executive, higher executive and administrative officer grades in the public service, Eircom, Fás, Pensions Board and elsewhere.
While Mr Murphy said PSEU members were prepared to take their share of the pain as part of a national effort to restore the exchequer's fortunes, he warned that they would strike if pay was cut. "Clearly, there are major economic problems and significant problems with the public finances and we are prepared, as part of an overall national approach, to discuss ways in which all parts of our society might make an effort to restore our economic balance and to promote growth into the future," he said.
"However, we have no intention of agreeing to actual cuts in our members' rates of pay or basic pension arrangements."
Mr Murphy added: "Given the intense media lobbying for an attack on our members' pay, we cannot assume that Government will simply accept our position. If Government decides to dismantle our entire social partnership structures by targeting public servants in the manner speculated upon, we will, unfortunately, be in a new era and we will be obliged to mount a campaign to protect our members through action, up to and including strike action."
Such a confrontation could "hardly be in the best interests" of the State "in the middle of an economic crisis", he said, adding that the unions were prepared to be constructive, "provided no unilateral actions are taken that would render our co-operation impossible".
The PSEU is traditionally one of the most moderate public unions.
Mr Murphy is also secretary of the Irish Congress of Trade Unions' public service committee.
