The Irish cabinet,the highest paid one in world democracy,is likely to give up its ridiculous pay grab instead of postponing it in order to gain credibility in pay talks with the public sector's unions and professional associations and to show leadership. Under honest Brian Cowen,there is an excellent chance of this. A pay freeze for the public sector looks inevitable given that it had been making out like bandits under Benchmarking with little or no productivity gains to show for it.
The alternative is economic disaster: tax increases imposed on an imploding economy to pay for continuing public sector pay increases would lead to prolonged recession and mass unemployment of up to 12%. The finance minister's vague talk of taxes on high incomes would be the thin edge of the wedge,given that taxes on the small minority of high income people at the top of the pay pyramid don't yield much revenue.
Politically,increasing taxes would be a strategic disaster for Fianna Fail. In contemporary democracies,the loyalty to traditional political parties can't be taken for granted and complete routs at the polls can happen when voters feel aggrieved.