Ireland Cuts Minimum Wage 11.5% to Protect 12.5% Corporate Tax Rate

The Fianna Fail government in Ireland has released the austerity plan it promised in response for the big bank bailout the rest of Europe forced on it.

There’s a lot that’s awful in it: big cuts in pension, huge increases in tuition costs, and a ludicrous claim that this austerity plan will help Ireland’s economy grow.

But I think the most telling aspect of it is that it lowers minimum wage from 8.65 euro to 7.65, a cut of 11.5%. But it retains Ireland’s controversial 12.5% corporate tax.

Meanwhile, the bond markets are none too impressed with Ireland’s plan.

There are lot of reasons to treat the plan with skepticism, if not outright derision. But I think the lack of confidence that this will work is the increasing likelihood that the governments on which the banksters are relying to push through this bankster bailout may not survive.

Imagine how banksters would fear the prospect that democracy will eventually, inevitably, if not here than in Portugal, get in the way of bank bailouts?

  1. earlofhuntingdon says:

    Creeping Americanism, from blue jeans and rock ‘n roll to obeisance to corporate masters. It would be time for a Guinness if it were not so sad, so serious, and with such growing momentum.

    The strange thing is that if they did that in South Korea or China – the economies whose standards of treatment and pay for labor the world is supposed to admire and emulate – heads would roll.

  2. earlofhuntingdon says:

    I’m an hour behind you right now, but since we’re talking about drinking and Ireland, it means brunch will start with Jameson’s.

  3. phred says:

    I envy the Irish. Once the voters kick out the current government, they might actually see different policies from the new one…

  4. PhilPerspective says:

    I hope the Irish riot and throw Cowan out on his head. Hope his party revolts, too. They have nothing to lose. Anyone know what kind of government Portugal has(I mean political party)?

  5. SirLurksAlot says:

    oh well, back to burning peat for fuel…as if the church hasn’t done enough damage to the country over the years, now they’ve got a vampire squid on their jugular. great people and great beer, terrible government.

    • Gitcheegumee says:

      China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade,according to an anoouncement by Vladimir Putin and Chinese Premier Wen Jiabo late on Tuesday.

      • BoxTurtle says:

        My bet: Max fine, actual time served behind bars: 0

        Whatcha got against witches? :-)

        Boxturtle the Wiccan (Most witches are nice people, but watch out for the Rabid Dianaics!)

      • MadDog says:

        My cynicism makes me wonder whether Delay’s conviction will ever stand through appeals in Texas.

        Remember that both Alberto Gonzales and John Cornyn were members of the Texas Supreme Court. Toadyism and cronyism are a prerequisite for Texas offices.

        And Texas Governor Rick Parry might suddenly remember that Pardon pen he can never find.

    • phred says:

      From your link:

      DeLay and his lead attorney, Dick DeGuerin, expressed shock at the verdict.

      I bet they were.

      Lets hope more corrupt/criminal politicians are prosecuted and convicted.

      • MadDog says:

        …DeLay and his lead attorney, Dick DeGuerin, expressed shock at the verdict…

        As in “What, say what? Since when is committing a crime, a crime?”

        • phred says:

          Exactly : ) I loved it when DeLay said something about “criminalizing politics”. The jury didn’t do that, the politicians did by turning it into a completely corrupt endeavor…

          And Gitcheegumee, thanks for the news about Ring — good times all around : )

      • Gitcheegumee says:

        Jut a few days ago,on November 19,Kevin Ring-one of Abramoff’s lobbyist confederates-was found guilty on 5 of 8 counts.

  6. hackworth1 says:

    Corporate water carrier, NPR was peddling Irish Austerity this week. NPR reported that it would be “disasterous” for Ireland to raise the corporate tax rate by any amount – even by a quarter of one percent. NPR explained that Microsoft and other multinationals in Ireland would leave if they had to pay one penny more!

    What a bunch of lousy motherfockers. Coming soon: Obama to embrace Bush Tax Cuts for the rich.

    • liberaldem says:

      I listen to NPR only because it’s marginally less irritating than the other news stations. Having said that, if they run Susan Stamberg’s self-indulgent cranberry twaddle one more year I may have to rethink this.

  7. TomThumb says:

    I heard that the IMF also told Ireland to create tax breaks to encourage women to get into the workforce, to improve their GDP. As if the average Joe and his family walked off with all of the winnings from the last ten years! I am sure that they can just bully everyone and go on and on against the poor without a general uprising./s

  8. masaccio says:

    Dún leis na Máistrí Corparáideach! [h/t google translate]

    And here’s how it’s done:

    A bas avec les Maîtres de l’univers! Dans la rue avec du goudron et des fourches!

  9. MadDog says:

    More OT – Via AP by way of the WaPo:

    Court asked to order probe of Gitmo psychologist

    A court was asked Wednesday to force an investigation into whether an Army psychologist developed abusive interrogation techniques for detainees at Guantanamo Bay and should be stripped of his license.

    The court petition, filed by the San Francisco-based Center for Justice and Accountability and the New York Civil Liberties Union, furthers human rights advocates’ efforts to spur probes of some psychologists involved in detainee interrogations. Critics argue that the psychologists’ activities amount to professional misconduct and that state regulators should look into the matter.

    Last summer, the California center filed a complaint about John Leso with New York’s Office of Professional Discipline, which oversees psychologists. Leso is licensed in New York; Army spokespeople didn’t immediately respond to inquiries Wednesday about him and where he could be reached…

  10. MadDog says:

    Tangentially on topic – Via The Guardian:

    Belgium joins financial markets’ hit list

    …Like Ireland, struggling to fend off criticism of its austerity package, there are signs that international bond investors are starting to view Belgium as living on borrowed money and borrowed time.

    To make matters worse, it has a broken political system and is without a government since April. International money market traders today pushed the cost of insuring Belgium’s debts to record levels. The interest payments still fall short of those charged for Spain’s government the Portuguese, but analysts said the gap was narrowing quickly…

    Dominoes anyone?

  11. BlueCrow says:

    Just another step in the feudalization of the world. Within 100 years we will all be China. The majority of the people will be underfed, living in mud-floored huts, and working 12 hour days in businesses/homes of the elite under the watchful eye of Simon and other corporate goons.

    Fight or grovel, brothers and sisters.

  12. DonS says:

    What am I missing here, that the corporate rate is scrosanct? Well I suppose if the US Congress can deny unemployment benefits in this hard time. And tax breaks for the filthy rich are patriotic, there is a correlation with Ireland that should give Americans little reason to tut tut.

    • emptywheel says:

      Because the Tiger all came from US companies (Pharma and software) using Ireland as their largely tax-free footprint from which to export to Europe. So Fianna Fail, at least, believes that low taxes are the single most important aspect of teh Irish economy.

      • MadDog says:

        I can confirm exactly that.

        Prior to my retirement, I worked for a medical device manufacturer who opened a “manufacturing” facility in Ireland for just that purpose. It was taxes (or specifically the lack of them) and nothing else.

        Yeah, the usage of English was nice, and so too was an educated employee pool to pick from, but make no bones about it, the 10 year tax holiday Ireland gave the company was the driving force.

        And the reason I put quotes like this around “manufacturing”?

        Because we shipped completed manufactured products to Ireland for sale in Europe and then spread some pixie dust on them and “Voilà! Made in Europe” and subject to far less EU taxes. Yes, eventually some manufacturing took place in Ireland, but not for 3-4 years.

        And for folks who really want to understand “corporations”, understand this: almost all heads of all major corporations and their wannabee successors come from the Financial side of the house.

        The ultimate goal of every company is to make money! And knowing how to game the tax codes is the surest way to a promotion.

  13. MadDog says:

    To EW’s tweet of:

    Here’s an honest question. After Citizens United, would Tom DeLay’s money laundering have been legal, or just unnecessary?

    The same question occurred to me. If the Delay defense team can bootstrap his Texas state conviction into Federal court, will the Citizens United ruling make the Texas state law unconstitutional?

    Perhaps I misunderstand Citizens United, but isn’t it about Federal campaign contributions? And therefore not necessarily relevant to states’ laws?

    I could swear that here in Minnesota (and elsewhere I believe) state laws about state campaign contributions are not affected by Citizens United.

    As IANAL, resident legal eagles feel free to chime in.

    • emptywheel says:

      Keep an eye on David Donnelly’s responses to my questions (I hinted I’d love to see him write a post on it and if he does I’ll post a link). His most recent tweet:

      if $ is spent to influence tx state elex, tx law holds. but ban on corp$ wouldn’t withstand legal challenge in light of CUvFEC

      • MadDog says:

        I can see interesting arguments on both sides of the issue.

        For example, consider that Repugs (including Tom Delay) have been notorious for advocating “States Rights”.

        Now have Delay’s defense team argue in Federal court that Citzens United means that States have no right to deny corporations their Federally-guaranteed “free speech” rights to contribute to and support any campaigns they desire.

        Delay’s defense team would be arguing that Texas law discriminates against corporation personhood.

        Delay’s defense team would be arguing this is a Civil Rights case!

        Who’d a thought.

  14. alank says:

    The Greeks started it. It’s also a pretext for cutting programs that Tories (and kindred spirits) hate — the ones that do not involve fat piles of cash going into their sacks.

  15. bluedot12 says:

    The world, and the USA, have become completely paranoid about debt and so the only thing to do is to cut debt and, if that puts people into poverty, so be it. I think the ideas behind this emanate from the rich elite ( no kidding Dick Tracy, guys like Murdoch and Koch and Kudlow) and they have some cover from economists who can’t find their asses with both hands. I become very depressed since I have no fucking idea how we can stop it and the wars that keep killing us and our people. The only way I see to change any of this is the ballot box and we just fucked that one up. Gonna mix a double and go to bed.

  16. OhioGringo says:

    Wow. Well, Ireland hasn’t had a good revolution in 90 years. Maybe they are overdue. It will be interesting to see what happens in the January election. The old socialists of the original IRA must be laughing in their heavenly brew as they remember their warnings in the 1920’s to not sell out to the capitalists in exchange for a new tricolor flag and different-colored uniforms.

    No, I’m not defending the IRA; I am appreciating irony. It is the banks that just screwed Ireland this time, after all, not the British Empire.

  17. papau says:

    the Irish minimum wage of about 24000 per year is a bit higher than the Brit minimum wage of about 18000 per year, or the US minimum for 40 hours/52 weeks of 15000.

    I do not know what is the correct minimum wage level – and Germany does not have a minimum wage – except it has agreements by business sector – so I do not know if the reduction is reasonable.

    But the 12.5 corporate tax – 10% is you can structure through London and still less via one of the islands – is the only reason for most of the relocation into Dublin. and much is such that it can be pulled quickly to other locations. The corporations control the governments these days.

  18. Ryan says:

    Portugal’s unions have it right… SHUT IT DOWN!

    Stop government, until government wakes up. General strikes is what we need across the world. The banksters and those in government who do their bidding need to learn a very important lesson: the world does not exist for the top 1-2%.

  19. atillathebun says:

    The financial problems that happened in the USA were felt much more quickly and harshly, but so is the action taken to try and fix them. Europe was able to cushion these problems because of their much more engaged social systems and much smaller, more regulated economies. However, the numbers just do not lie and eventually catch up with all of us. With regard to Ireland and the UK specifically, there are now millions of people that have never had a job…and that is going back generations. In good times, they are covered and it does not bother people that much. But when the jobs go and revenues to support them fall, the problem compounds itself and unless spending is cut, their economies fail. So Ireland, Greece, Portugal, Spain and Italy will cut their spending until they balance their books. The poor will suffer but the alternative could be worse. I wish the Irish well.

  20. captjjyossarian says:

    Moody’s is threatening a multi- notch” downgrade of Irish banks. After giving AAA ratings to subprime junk, it’s absurd that they are even in business let alone playing the part of international tough guy.

    One letter writer at the Irish Independant correctly calls the IMF deal treason.

  21. captjjyossarian says:

    5 Months ago, all Irish banks passed the European Bankster Stress test.


    I hope the Irish manage to wiggle out of the IMF deal. They’ve already had more than thier fair share of foreign originated austerity plans.

  22. stevenjbailey says:

    Ireland’s new national motto.

    We will punish the poor to whatever length necessary in order to prove our fealty to our corporate masters.