It seems that Ireland’s austerity measures, which are going to hit the working class for years, do not apply to the large foreign tech companies who invested in the Emerald Isle.
Ireland has been frantically cutting its minimum wage, upping its property taxes, slashing the welfare state, everything that will hurt, in a bid to get the country’s economy working again and getting a a bailout from its international partners.
But while much of the 15 billion euros in savings the Irish have pledged to find over the next four years will come from the welfare state and the working class, it seems that the measures will not touch large businesses like Microsoft, and Intel which have created thousands of jobs and fuelled exports in Ireland for years.
The Wintel alliance has been flat out in Ireland thanks to having to pay one of the lowest corporate tax rates in Europe.
Germany, France and other European countries have long complained that Ireland’s tax structure has distorted competition. Some politicians have seized on the troubles by pushing for an increase in the 12.5 percent rate as part of a rescue package of about 85 billion euros (or $114 billion), the terms of which are still being negotiated.
It seems that the Irish are reluctant to increase taxes to the big IT companies out of a fear that they might take their jobs elsewhere.
However there is pressure to increase rates just a little to help the country collect significant revenue.
Ireland has been poaching tech outfits like Intel, Microsoft, Google, Facebook and LinkedIn from the US with its small, open economy with a well-educated, English-speaking work force and with a relatively stable social compact between unions and companies.
Google has been reinvesting and expanding operations. This summer, the company announced it would hire 200 people to run a new operations centre on top of the 1,500 staff members already there.