The Irish Congress of Trade Unions (Ictu) has said it will resist any move by the Government to impose unilaterally pay cuts across the public service following the collapse of the proposed new Croke Park II agreement.

Following a meeting this morning it said changes could only be brought about by way of consultation and negotiation.

The executive council of congress unanimously endorsed the outcome of the ballots of public service workers which saw the Croke Park proposals rejected over recent days. The public services committee of Congress, which conducted the recent negotiations with the Government that led to the Croke Park II proposals, is meeting this afternoon.

Eoin Treacy's view In many respects Ireland has been the poster child of the Eurozone's bailed out economies. This was achieved in no small part by ability of the government to secure public sector agreement to pay cuts, tax hikes and process reform. The question now is how the government will secure the additional savings it has committed to under the bailout agreement without the acquiescence of these unions. The prospect of strike action has increased substantially and a potential collapse of the government cannot be ruled out.

Ireland's first 10-year benchmark bond was issued successfully last month and yields continue to contract. Considering the above threats I find myself wondering how sustainable this contraction is.