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Irish government workers will stage the biggest strike in at least three decades today in protest at plans to cut pay to contain the budget deficit.

Nurses, teachers and tax officials are among around 250,000 workers taking part in the 24-hour nationwide stoppage over what unions have said are “vicious” cost-cutting plans by the government, which is grappling with a deficit amounting to about 12 percent of gross domestic product.

Ireland, once Europe’s most dynamic economy, has been hit by a property crash and the global recession, eroding tax income and pushing the shortfall to 26 billion euros ($38.9 billion) this year. Finance Minister Brian Lenihan wants to cut about 4 billion euros from spending in the Dec. 9 budget to rebuild investors’ confidence after borrowing costs soared.

“Strikes will send the wrong signals,” said Alan McQuaid, chief economist with Bloxham Stockbrokers in Dublin. “If the international market sees the government standing up, they will see it as a good thing. There is a steely determination on the part of the government to do the right thing.”

The stoppage has been partially scaled back due to flooding in the south and west of the country after heavy rainfall. Hospitals and emergency service workers will maintain services in those areas, unions said on Nov. 22. The strike today will still close shut social welfare offices, passport offices and the public offices of the state tax authorities.

“The private sector has had to discount and cut costs, the public sector must respond,” said John Forde of Dublin- based Chambers Ireland, which represents 13,000 companies. “Hard decisions must now be taken to resolve this issue.”

Lost Rating

The difference in yield, or spread, between 10-year Irish securities and 10-year German bunds was at 150 basis points yesterday. While it’s narrowed since reaching 284 basis points in March, the spread remains five times wider than its average over the last decade. Ireland has also lost its top credit rating at Standard & Poor’s, Moody’s Investors Service and Fitch ratings this year.

The government said this month that the deficit will hit 14 percent of gross domestic product next year, almost five times the European Union limit, unless it takes action. It sees the economy, which doubled in size in the decade through 2007, shrinking 1.5 percent in 2010 after a 7.5 percent contraction this year.

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