Four Irish unions walk out of key public service pay talks

DUBLIN (Reuters) - Four unions representing Irish public sector workers walked out of negotiations on Sunday to revise a public sector deal that has kept the industrial peace, dealing a blow to government efforts to generate one billion euros $1.3 billion (860.7 million pounds) in savings on a bloated pay bill.

The government started a new round of talks with unions last month to revise the so-called Croke Park deal that has helped implement tax hikes and spending cuts under an EU-IMF bailout without significant social upheaval.

Dublin has set a deadline of Thursday to reach an agreement that overhauls the current deal, which has steered Ireland away from the kind of industrial action that has held back fellow bailout recipient Greece.

The Irish Nurses and Midwives Organisation (INMO), the Irish Medical Organisation (IMO) followed by the Civil and Public Services Union (CPSU) and Unite trade union left the talks over government proposals to reduce income and increments.

"The scale of the cuts proposed would be hardest felt by those on low salaries that cannot afford to give more; and that they will add tens of thousands to the number of unemployed and those forced to emigrate," said UNITE Regional Secretary Jimmy Kelly.

Irish public servants took wage cuts averaging 15 percent before making agreements in the Croke Park deal, which was signed up to by Ireland's strongest public sector unions in March 2010.

One of the latest proposals put forward by the government is to cut pay for higher earners, believed to have a threshold for workers making in the region of 60,000 euro per year.

"It's very regrettable when any union chooses to leave talks at a late stage in any negotiations, however, it could be said that we're not surprised given the unions' resistance to change on issues of pay," a government spokeswoman told Reuters.

Irish trade unions' cooperation with a string of unpopular governments, most of them centre-right, has helped Ireland to make greater progress than any other troubled euro zone debtor in reviving its economy despite deep budget cuts.

Earlier on Sunday, Siptu, one of Ireland's two major public service trade unions, warned of "protracted strikes" if a reasonable outcome does not emerge to extend the agreement.

"The hawks on the government side should wake up to the reality that if they push us into a war it will not be conducted over the airwaves or in sports arenas," Siptu president Jack O'Connor said.

Ireland's other major public service trade union Impact is continuing to take part in talks, but said it would not accept government proposals for a total freeze in all increments.

(Reporting by Stephen Mangan; Editing by Stephen Powell)