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I presume this is some sort of attempt at building a negotiating position - some sort of credible fallback for if the others push too hard and force Ireland to walk away.

It's possible at this stage that the Irish government - who yesterday announced no income tax increases will be in the next  budget (which is a good thing in the context of the depths of a recession/depression) - realizes the insanity of the situation and is looking for a way out, either by  negotiation or force.

by Colman (colman at eurotrib.com) on Fri Jun 17th, 2011 at 06:17:18 AM EST
That's the hopeful interpretation.  The more cynical one being that Noonan had to say something as the 100 days in Office were up and the Government had promised to "burn the bond-holders".  His subsequent row-back doesn't say much for his ability to sustain an argument or negotiating position.

I have to disagree on income tax.  It is one of the few progressive taxes we have and given that part of the problem in Ireland is that high earners are earning far to much, the introduction of a 60% rate on higher incomes would have been an effective way of balancing the current attempt to reduce the wages of relatively low income Hospitality and Building sector workers.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Jun 17th, 2011 at 10:05:42 AM EST
[ Parent ]
But the two are unconnected. The low earners are being attacked to bolster profits. They'll do that anyway.

Also, why are high earners' incomes a problem? I thought it was just high earning civil servants that were a problem? You think taxing barristers more will reduce their fees for some reason?

by Colman (colman at eurotrib.com) on Fri Jun 17th, 2011 at 11:09:38 AM EST
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For most businesses, hourly wage rates of 10-20€/hour are not a problem, however high legal fees often are - to the point that most companies settle even outrageous cases out of court because of the costs involved. This has knock on effects for insurance premiums, business overheads, attracting skilled employees and ultimately for workers cost of living wage claims.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Jun 17th, 2011 at 12:39:35 PM EST
[ Parent ]
Sure, but raising taxes isn't going to reduce legal fees. More likely the opposite.
by Colman (colman at eurotrib.com) on Sun Jun 19th, 2011 at 07:06:58 AM EST
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Also, they've said they're not going to cut welfare payments again, for whatever that commitment is worth.
by Colman (colman at eurotrib.com) on Sun Jun 19th, 2011 at 07:07:58 AM EST
[ Parent ]

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