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Paying for military bras, shoes for civil servants and bonuses for handling animal carcasses is the price of industrial peace in Ireland.

After reviewing more than 1,100 special allowances for state workers, the government last week abolished one: a travel expense. Among those it kept are the 27.40 euros ($35.80) a year for female soldiers to buy underwear and night attire and 47.92 euros a week for attendants to ensure post is delivered to staff at the Chief State Solicitor’s Office before 9.15 a.m.

“The failure to implement further planned cuts in expenditure is a worrying development,” said Conall Mac Coille, an economist at Dublin-based Davy, the largest Irish securities firm. “It is going to be very difficult for the government to pursue the needed cuts without touching pay and services.”

The 1.5 billion-euro annual bill for such payments in Ireland illustrates the difficulty governments in Europe’s most indebted countries face in averting widespread strike action while still trimming spending. Greece’s two biggest unions plan to hold another 24-hour general strike tomorrow.

For political opponents, the Irish government’s reticence to cut allowances highlights a wider reluctance to tackle pay for state workers, spending overruns and tarnishes the country’s image as a model of austerity.

Worst Situation

Public sector unions haven’t staged a mass strike since 2009, and last year, the number of days lost to industrial unrest fell to 3,695, less than a third of the time lost in the latter days of the so-called Celtic Tiger economic boom.

“In the most appalling circumstances this country has ever faced, we have industrial peace,” Pat King, general secretary of Ireland’s largest labor union for high-school teachers, said in an interview. “We’re trying to encourage inward investment and if the image of Ireland was one that was torn by industrial strife you wouldn’t get that.”

Ireland was lauded by central bankers such as European Central Bank President Mario Draghi as a model of austerity. Yet government spending has risen about 20 percent since 2006, the peak of the boom, even after cuts in the last two years.

While the government had targeted 75 million euros in savings on allowances and so-called premium pay in 2012, the plan sketched out by Public Expenditure Minister Brendan Howlin last week will lower the bill by about 3.5 million euros. The single allowance abolished is payment to officials representing the nation at international meetings.

Committee Probe

The Irish Parliament’s Public Accounts Committee plans to hold an “in-depth analysis” of allowances, committee chairman John McGuinness said by phone today. The group requested information from each ministry on the payments and aims to conclude hearings with the top official of each department before the 2013 budget is announced in early December, he said.

Others payments remain. Police offers appointed safety advisers and working from 9 a.m. to 5 p.m. are paid an allowance as they are denied the chance to earn overtime, documents on the Public Expenditure and Reform Ministry’s website show.

At the National Museum of Ireland, workers receive an allowance for franking post, while a telephonist gets a special payment for answering the phone. The amounts aren’t specified.

New Shoes

Elsewhere, about 200 service officers receive an annual 65 euros for “navy or dark” shoes. Fishery officers get an allowance for lunch breaks away from their base, while five people working at two airports for the weather service are paid a total of 7,500 euros for traveling to and from work.

“The fact that just one allowance out of over 1,100 is being cut for existing public servants shows that this government is prepared only to talk about taking difficult decisions,” said Dara Calleary, jobs spokesman for Fianna Fail, the biggest opposition party.

Prime Minister Enda Kenny’s Fine Gael-Labour coalition has committed to protect core public sector pay until 2014, under an accord known as the Croke Park agreement.

The deal came after government workers, whose pay had been cut by about 14 percent on average since the financial crisis started in 2008, staged the biggest strike in at least three decades in November 2009.

With pay off limits, services are under threat. Calling the Croke Park agreement the elephant in the room, Health Minister James Reilly last month laid out cuts to services, prompting concern that help for the disabled may be scaled back.

‘Croke Perks’

“Croke Park or if you are from our world, Croke Perks, is totally adored here,” said wheelchair-user Martin Naughton, who led a campaign that forced Reilly to seek cuts elsewhere in his budget. “It is absolutely protected.”

Pay for government workers on average is 50 percent higher than at private employers, according to report by the country’s Central Statistics Office on Aug. 29.

The government is reducing its workforce through early retirement programs and not replacing those who leave. The number of public service workers has fallen by 10 percent since 2008, with another 7,500 to go by 2015, according to the Public Expenditure and Reform Ministry.

As the controversy grew, Howlin, the minister responsible, told national broadcaster RTE yesterday that “people get fixated on a tree while I am trying to control a forest.”

If the state seeks unilateral cuts after the Croke Park accord ends “the only action left then, if we’re not talking, is industrial action,” said Pat King. “That’s lose-lose.”

To contact the reporter on this story: Finbarr Flynn in Dublin at fflynn3@bloomberg.net Dara Doyle at ddoyle1@bloomberg.net

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net

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