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The class logic of Irish austerity

When we look at the Irish government proposals to meet European austerity targets in the forthcoming budget (available to its victims via the German parliament) the most striking element is the unrestrained savagery of the Irish gombeen capitalist. The only element of defiance is that they insist on doing more than Europe calls for.  So they hand hundreds of millions to unsecured bondholders,  fight  to the death to subsidise the transnational companies with 12.5% corporation tax and ignore suggestions that they should make minor increases in the income tax rates for their own class to bolster the “we are all in this together” ideology.

This determination to pay nothing themselves means that the budget is heavily skewed towards cutting jobs and services, with less from tax.  Where the still very substantial taxes are to be levied, they are designed to hit workers and spare the rich.

The government have a free hand because the vast majority of Irish workers realise the absolute dependence of Irish capitalism on inward investment, especially by the US, and see no alternative to living through the austerity.  This effect is amplified by the role of the trade union movement in supporting and implementing the cuts agenda and the absence of a working-class party.

A good  example  is the outrage over the proposal to increase VAT. The debate centred on a 26 county nationalism that complained that shoppers would flow to the British enclave in the North. The government defence was that they had to avoid raising income tax. No-one pointed out that the VAT bill would fall most heavily on the poor or that the well off still pay little tax. Another major plank of the budget is an €100 household charge – a regressive tax that subsidises the rich at the expense of the poor.  Meanwhile all sorts of outrageous property taxes  remain  in place and parasites such as Ryanair successfully campaign for further subsidies such as a rock bottom airport tax. The avoidance of tax runs alongside immense sums taken from public service  and many state resources handed over to the private sector at knockdown prices.

Eamonn Gilmore, the Labour party leader, has warned the trade unions that they must continue to deliver cuts through the Croke Park agreement.  This was sold to trade unionists on the grounds that their conditions would remain the same, but the latest tranche of cuts may see up to 2000 teachers sacked, with the same sorts of cuts across the public sector and with the union leaderships on the committees overseeing the cuts.

On grounds of logic it is possible to argue that the austerity isn’t working – the government debt is increasing and the domestic economy continues to weaken.  But that would be the wrong logic.  Exports, and the transnational companies who generate the exports, are booming. It is simply not the case that their profits will ever “trickle down” to the Irish working class.


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