AFTER 113 days of talks and following yet another carefully choreographed 11th hour intervention by Taoiseach Bertie Ahern, unions and employers last Tuesday finally agreed a 10% pay increase over 27 months. This works out at 4.4% a year and depending on the expiry date of the current deal . . . Sustaining Progress . . . will be paid as follows >> 3% from day one >> 2% after six months >> 2.5% after another six months >> 2.5% after another six months to last a further nine months Low paid workers, or those paid less than 10.25 an hour, will get an extra 1/2% after the first six months ie 2.5% rather than 2%.

The deal also includes measures to make it difficult for employers to sack their Irish workforce and replace them with cheaper non-national workers.

Who are the winners?

David Begg and the unions, by a good length. They had argued strongly for a 10% increase, albeit over a slightly shorter time-span of two years. With inflation now at 3.8% and projected to reach 4% by the end of the year, private sector unions said they simply could not sell anything less than 4% to their members. Though unions representing higher paid workers, such as the banker unions, are still grumbling that a little over 4% hardly represents a glittering prize after over a decade of boom, they'll live with it for now.

Ibec leader Turlough O'Sullivan said he was happy, even though employers had talked about the necessity to keep any pay rises below or at least on a par with our European neighbours, most of whom have settled for around 3% a year.

But O'Sullivan is also aware that most of the larger, highly profitable businesses can afford the increases while those that can't can use the by now standard 'inability to pay' clause.

The really big bonus for O'Sullivan is industrial peace and security . . . at least for a further two and a quarter years.

Both Begg and O'Sullivan have also re-booked their 'silent seat' at cabinet where they enjoy daily access to the Taoiseach on almost all important matters of state.

But Fine Gael's Enda Kenny or even Labour's Pat Rabbitte are unlikely to have quite the same welcome for the unions.

And the losers?

The biggest losers are the economy and people trying to scramble into the housing market. The economy is already overheating and prices are shooting up. Into this boiling pot will be added maturing SSIA accounts, an expected giveaway budget in December in advance of next year's general election, the latest pay increases, which will push up prices even further, and there is a real danger that the pot will boil over.

Employees on low wages also lose out. In keeping with the six previous agreements, the lower paid or those on 10 an hour or less have once again been left adrift on the earnings ladder. An extra 0.5% increase will hardly push them into the top tax bracket.

One of the biggest unions in the country, Mandate, which represents shopworkers on a maximum of 12 an hour, pulled out of the pay talks altogether on the basis that such national deals did nothing for the low paid. It was right.

What about the politics of it all?

Though a deal with the unions is hardly going to deflect the heat from the government, a failure to conclude a seventh successive partnership deal would have heaped more pressure on the Taoiseach, whose political success is largely based on the success of these partnership agreements.

An undisputed master of the 'last-minute' intervention, Ahern pulled off the exact same intervention stunt three years ago, when the talks on Sustaining Progress were in similar trouble.

Then, the government jet was idling on the runway bound for South America. Flanked by Tanaiste Mary Harney and the then finance minister, Charlie McCreevy, Ahern descended on Government Buildings at 2am, slapped a compromise pay deal down on the table between the hopelessly deadlocked unions and employers and told then to either take it or leave it. They took it.

This time he was on his way to the UN, at a more respectable hour of the day and with Micheal Martin in place of McCreevy.

There was a bit more cajoling this time, but the result was the same.

The deal was done and the Taoiseach flew on to New York.

There remains some work to be done on pensions and other social measures as well as the modernisation agenda for the public service. But the pay deal has the strength to pull everything else with it.

Is that it?

Not exactly. While that's the lot for private sector workers, the country's 300,000 public servants can look forward to a second helping when the benchmarking pay report comes out next year.

This drives the private sector unions mad and will deepen the growing public/private split within the Irish Congress Of Trade Unions.

Last time, in 2002, benchmarking gave 9% on top of the national pay increase to public servants, generosity which cost the exchequer 1.1bn.

The 10% national pay increase agreed last week will cost the exchequer an extra 1.7bn on public service pay. Benchmarking is likely to bring that extra cost to the taxpayer up to 3bn over the next three years. Industrial peace and stability does not come cheap.