Public sector's fudge of a deal is bad for us all

Here's my rant in today's Irish Independent about the proposed compulsory unpaid holiday deal seemingly struck between government and the unions. Long story short, it's a very bad idea. But maybe the title gave that away.

The deal struck between the social partners is the worst possible outcome for the economy, the taxpayer, service users, the Government, and the public sector worker. The macroeconomics of the situation just does not stand up. 'Fudge' is too kind a word.

If, and it's a big if, you accept the need to reduce the Government's budget deficit by €4bn, as the Finance Minister has sworn a hole through a pot to do, then only coming up with €860m when you need €1.3bn is a credibility disaster. It also implies higher future borrowing from an increasingly sceptical international bond market because of Ireland's reneging on previous commitments to our international partners. This deal cannot help matters. It also means the gap to be plugged between government receipts and expenditures gets larger.

Read more here.