Irish Central Bank calls for further wage cuts


The key quotes from this seem to be:

“The bank has marginally cut its growth forecast and increased its estimate for unemployment for 2012. It has also called on the Government to cut the deficit more quickly than planned.”

“On the issue of pay, the Central Bank said remuneration remains too high in the public and private sectors, which it warns is discouraging expansion and investment by exporters.”

“In an interview with RTÉ News, Central Bank’s Chief Economist Lars Frisell said wages were 10% higher than that of Ireland’s trading partners.”

“The inflation rate is expected to come in at around 2% for 2012”

So to summarise – harsher austerity and another round of wage cuts for workers against a backdrop of inflation already decreasing spending power.

And all to make the economy more “competitive” and “attractive” for exporters.

But what does that really mean?

It is the multi-nationals (mostly British and US) that do the bulk of the exporting from Ireland (around 80% of total exports). That is within an overall context of British and US corporations making record profits (see http://research.stlouisfed.org/fred2/series/CPATAX as an example of this in the context of the US – which, as an aside, contrasts sharply with the steadily decreasing amount of tax they pay – http://research.stlouisfed.org/fred2/graph/?g=3p6).

That is what “we” need to be competitive with – the major multinational investors in this country who are making record profits. How to keep up with those record profits – drive down wages!

This is the truth behind “the pain we are all sharing”.

Any solution to the attacks on working people must begin from this understanding of the key role of the multi-nationals. Along with repudiation of the debt we must expropriate these parasites who are sucking us dry, along with their Irish-based junior partners in crime. There is no other solution that can meet our needs as working people. This is of course not possible in isolation and must be part of a European-wide response – concrete internationalism is a necessary requirement of any socialist solution in Ireland. Any workers’ party we build must be actively seeking links with other workers organisations in Britain and across Europe from the very beginning of its existence.


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