Ireland’s economy is not yet sufficiently recovered to consider reversing cuts in pay imposed during the years of austerity, according to a former president of employers’ group Ibec.

Julie O'Neill, who was the first woman president of the organisation and is now in charge of global operations at rare-drug company Alexion, said some of the austerity years' gains in competitiveness were already disappearing.

“I think we got to a very good space between 2008 and 2012 with the sacrifices that people had made, and I would like to think we have learned the lessons of that,” she said. “I’m not as close to all the data as I was, but have we seen the productivity enhancement that was expected that were the quid pro quo for the return of pay cuts?”

Investment

Ms O’Neill headed Ibec between 2011 and 2012. Earlier this week, she announced a €450 million investment by Alexion in a new drug-manufacturing operation in west Dublin, which is expected to employ 200 people on completion.

“I think this clamour for reversal of cuts is opportunistic and not well thought through,” she said. “I don’t think we are at a stage in the economic recovery where businesses in any sense can afford to give those level of pay cuts [back] without substantially damaging their ability to recover.

“I think the pressures in the public sector – we know budgets are still constrained, we know there are cuts still to be made – I just don’t think it is appropriate at this time to row back on many of the changes.”

She also expressed concern about the accelerating speed of the economy.