The European Commission plans to give a “thorough assessment” of a four-year budget plan to be released on Tuesday. According to the Irish Times, “The European authorities and the IMF are working on the basis that they will receive a request for emergency aid from the Government next week, after the publication of the plan.”
If Ireland does accept aid, it will become the equivalent of an economic slave to the EC and probably the IMF. In exchange for tens of billions of dollars in loans, it will face constant probes of its finances and pressure from its peers to keep to tough austerity plans much the same as those Greece was forced to adopt.
Any agreement will cause social unrest in Ireland as austerity hits social programs and consumer incomes. Current political leaders will face an expulsion from office by voters due to the hope that a new leadership will repudiate the restriction put on the nation by its neighbors.
To make matters worse, Ireland may have to raise its extremely low corporate taxes which have drawn oversees companies to the nation. That increase in the tax is likely to be regressive because it will cause some corporations to move their business. Ireland’s tax receipts could actually plunge due to a second recession brought on by the growing housing crisis there and a drop in corporate tax receipts.
Douglas A. McIntyre
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