EVEN BEFORE the first marchers arrived for yesterday's demonstrations, a succession of Cabinet Ministers had made it clear the Government was not changing its economic strategy.

The day of action organised by the Irish Congress of Trade Unions was not about public sector pay but formed part of an overall campaign aimed at promoting its alternative to the Government's plans to reduce spending by [euro]4 billion in the forthcoming budget.

Ictu has proposed a 10-point plan which involves higher taxes for the wealthy and spreading the pain of the economic adjustments over a longer period. The trade union movement has allocated about [euro]1 million to promote its "fairer alternative programme" for national recovery.

However, it now seems unlikely that the Government will take on board Ictu's blueprint. While the turnout at yesterday's demonstrations is in dispute - with Ictu claiming nearly 150,000 people in total attended the eight rallies in the Republic - the Garda estimate that only about half that number took part is unlikely to make the Government contemplate a change of heart.

In the aftermath of yesterday's day of action, Ictu will now continue its advocacy campaign with town hall meetings around the country. General secretary David Begg said last night that behind the scenes contacts were continuing with the Government and it was a possibility that the parties could resume talks on an agreed economic recovery programme before the budget.

However, he warned that "space would have to open up" before this could happen. All the social partners are reluctant to re-engage in formal talks without some prospect of a deal as they all believe another collapse could send out all the wrong signals to the international markets.

Unless either side can come up with some compromise on their diametrically opposite economic strategies, new social partnership talks seem unlikely in the short term. As things stand the country seems set on a course for significant industrial unrest.

In the private sector, Siptu, the largest private sector union, has balloted members for industrial action in companies which have not paid the increases under last year's social partnership deal or negotiated some alternative.

However, Siptu has not given any indication of the numbers involved or the results of any ballots, so it is difficult to gauge the level of support for strike action in the private sector.

But in the public sector significant industrial action seems likely over the Government's plans to reduce the public sector pay bill by [euro]1.3 billion, although no one has credibly been talking about an indefinite all-out strike.

Instead what could develop into a nationwide public sector strike is scheduled for November 24th. Such a one-day stoppage could close schools and cause disruption in hospitals.

Next week public sector unions and Government officials will resume talks on ways of cutting the pay bill by [euro]1.3 billion without imposing further pay cuts. The Irish Times has over recent days outlined the shape of an alternative package of measures under consideration. These would involve reducing numbers in the public service, possibly by between 12,000-25,000 from 2011 as well as introducing significant reforms and productivity measures.

However, to plug the gap until these savings come on stream "bridging mechanisms" would be needed next year.

More than likely this would involve reductions in non-core pay such as allowances, overtime or premium rates. Increments could also be targeted, while Tanaiste Mary Coughlan raised the prospect yesterday of staff working extra hours for no pay.

However, there is no guarantee public sector unions would all agree to any such deal. The new 24/7 frontline alliance is totally opposed to cuts in these areas.

Yesterday's demonstrations may have attracted fewer people than the Dublin march last February when more than 100,000 turned up in the aftermath of the introduction of the pension levy. Yesterday's demonstrations were aimed at supporting a more amorphous fairer economic strategy. It will be more telling to gauge the response of members to the unions' proposals for the one-day public sector strike on November 24th which, if it goes ahead, will be focused exclusively on protecting existing earnings.

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