(Updated Nov. 24) Ireland: Fianna Fail/Greens cave in to EU/IMF on `bailout'; Left vows to fight austerity

November 23, 2010 – Irish Republican News – The public finances of the 26-county state [Ireland] will, for the next three years at least, be subject to “regular reviews” by external monitors working on behalf of the International Monetary Fund (IMF), the European Union (EU) and the British and Swedish governments.

On November 21, the Taoiseach [Prime Minister] Brian Cowen and minister for finance Brian Lenihan, after a week of shocking lies and deceit, said they were accepting the IMF/EU bailout. It later emerged that the G7, comprising the seven most powerful countries in the world, had met to give its approval to the deal.

The total of the IMF and EU funds, as well as aid from the British exchequer and elsewhere, is expected to reach about 100 billion euro. Most of the money is destined to disappear into the Irish banks, which are coping with unknown losses and whose potential collapse is said to be threatening the European and even the global economy.

The program, as agreed with the international bodies, will last three years. However, the exact amount of the financial aid and the conditions to be applied to all of the funds still remain unknown.

It was also disclosed that, separately, Britain and Sweden are both to extend multibillion-euro loans to Ireland, also with undisclosed conditions.

Cowen said the package would have two elements. The first would be a deep restructuring of the Irish banks. “Irish banks will become significantly smaller than they were in the past”, he said. The second part of the “strong policy program” would be increased taxes and reduced spending in order to reduce government borrowing by 15 billion euro over the next four years.

On the question of relinquishing sovereignty, Cowen claimed the budget and four-year plan would not be changed by the external bodies but said “a small, open economy like Ireland did not have the luxury of taking decisions without reference to the wider world”.

Lenihan said the state’s options had narrowed considerably since the banking and construction collapses in 2008. “It is essential that we maintain economic continuity, that everyone understands that ATM machines function, that salaries are paid, that the big workforce that has built up here continues to be employed, that a large number of overseas investors continue to invest in enterprise”, he said.

Reacting to the announcement , Sinn Fein President Gerry Adams said the government has no mandate to do what it is doing. “It has handed over authority for the state to outsiders in order to get a digout for the banks, which the Irish people will have to pay for. The government should resign so that citizens can have their say in a general election.”

Sinn Fein TD [member of Ireland's parliament, the Dail] Aengus O Snodaigh said on November 21 that the government should throw the IMF out of the country. Deputy O Snodaigh said Irish sovereignty was not something that Fianna Fail and the Green Party [coalition government] could “sell off to the highest bidder”.

“They have absolutely no mandate for any of what they are doing and they are acting against the wishes of the people.

“This government has brought the country to the brink of economic collapse and now they want to sell of our hard won sovereignty to the IMF. The history of the IMF in other countries is one of privatisation of vital public services and mass unemployment. But there is another way. It’s time to burn the bondholders and nationalise Bank of Ireland and Allied Irish Bank.

“The government should throw the IMF out of the country before resigning and calling a general election. Irish sovereignty is not something that Fianna Fail and the Green Party can sell off to the highest bidder."

Sinn Fein TD, protesters attacked

A group of 100 protesters clashed with Gardai [police] as they made their way the gates of the Dublin parliament earlier on the afternoon of November 22, following a protest against the government’s handling of the economy.

Some members of the group, led by Sinn Fein TD Aengus O Snodaigh entered the Merrion Street gates of government buildings. A number of the protesters, including O Snodaigh – the TD for Dublin South Central – were pushed and punched by members of the police.

The group were calling for the immediate resignation of the Taoiseach Brian Cowen, following the announcement that the government had been forced to seek emergency bailout funding from the European Union and International Monetary Fund.

Amid the fracas, O Snodaigh, who was attempting to calm the situation, was among those assaulted before an impromptu sit-down protest eventually saw tensions dissipate.

There were also scenes of anger at the Dublin parliament on November 21 night during a protest involving Dublin Sinn Fein members and local Ogra [Sinn Fein Youth] members. A contingent of Sinn Fein and Ogra activists had gathered with other members of the public outside government buildings following news of the Fianna Fail/Green government's EU and IMF bailout.

Eventually, government ministers were driven to the gates when Sinn Fein and Ogra activists staged a peaceful sit-down protest.

A number of Gardai employed brutal tactics in an effort to move the protesters, while another Garda motioned for the state cars to continue on their path, with one state car, believed to be that of a senior minister, running over the leg of a young Ogra Shinn Fein activist. An ambulance quickly arrived and the Ogra member was brought to hospital. Ogra Shinn Fein spokesperson Daithi Byrne criticised both the government and the Gardai who interfered with the peaceful sit-down protest.

“Today’s developments has created huge anger in this country. We have, effectively, been bought and sold. The government has ran up the white flag of surrender to the IMF/EU who are notorious for their utter contempt for the rights of working-class people. Already, within hours, the government is dancing to their tune, with rumours of cuts to the minimum wage and social welfare. Surely we can't be blamed in that context for protesting?

“The Gardai dealt with the peaceful protest irresponsibly. The heavy-handed tactics employed effectively resulted in a hit and run incident which seen a dedicated Ogra Shinn Fein activist sustain an injury. The events today, couple with those which took place at the recent national student march, demonstrate the widespread anger but also the low tolerance for peaceful protest.”

Greens ‘cut and run'

Independent TDs oined with the opposition parties to pile pressure on the crumbling Dublin government to pull the plug after the Green Party on November 23 finally succumbed to public outrage and said it is set to pull out.

The Greens have called for an election to be called by the end of January, but the opposition parties and the public are clamouring for Brian Cowen’s renegade regime to quit as soon as possible.

With negotiations on an IMF/EU bailout continuing and a massive budget adjustment inevitable, the discredited administration has clung to power in recent weeks even as its last claim to a mandate disappeared.

With only the support of Minister for Health Mary Harney to count on, the Fianna Fail/Green Party coalition has lost its working majority, with only 80 TDs in the Dail, compared to 81 TDs now forming the opposition.

Sinn Fein’s senator Pearse Doherty is the favourite to win the forthcoming Donegal South West by-election, a result that would further strengthen the opposition. Three other by-elections are pending, all certain to be lost by the government. The High Court in Dublin has ruled that two of these should already have been held, a ruling that the government has so far ignored.

At a press conference on November 23, Green Party leader John Gormley defended his party’s decision to stay in government with Fianna Fáil until after the budget on December 7, insisting it was in the national interest to ensure it was passed.

“We have always said that our involvement in government would only continue as long as it was for the benefit of the Irish people. Leaving the country without a government while these matters are unresolved would be very damaging and would breach our duty of care”, he said, adding that the Irish people need political stability over the coming months.

But Sinn Fein Dail leader Caoimhghin O Caolain accused the Greens of "cutting and running" while denying the people an immediate general election. “It is absolutely shameful that this party is denying the people an immediate general election and helping Fianna Fail to inflict further massive damage on the Irish economy and Irish society”, said Mr O Caolain.

“The Green Party has played a disgraceful role in one of the worst cabinets that has ever governed in any country. We now have the unprecedented situation where a coalition partner has announced it is to pull out of a government while at the same time preparing to help frame and vote for its budget.”

Maverick independent Jackie Healy-Rae issued a statement saying he can “no longer honour his word” to the Fianna Fail and the time has come to “go to the people”. The TD for Kerry South said recent events “have totally undermined whatever little bit of confidence” he had in the government. He accused Brian Cowen of telling “blatant lies” to the Irish people regarding the IMF and EU, and added it was “very unlikely” he would support the annual budget next month but would have to wait to see what it contained. Along the proposals expected to be included are highly controversial cuts in social welfare and the minimum wage.

Tipperary North Independent TD Michael Lowry also withdrew his support from the Fianna Fail-led government. He said that while his vote was no longer guaranteed, he believed that the budget had to be passed in the national interest. But he said that the Fine Gael and Labour parties should say whether they are going to cooperate with the budget – and that if they are not, that a general election should be called immediately.

Labour Party leader Eamon Gilmore called on Taoiseach Brian Cowen to dissolve the Dail and said the electorate should be able to vote in a new government as early as next month. He said the Greens “had finally recognised the government was past its sell-by date”. “Fianna Fail has made a mess of the country; they have crippled the economy and and brought national morale to an unprecedented low”, said Gilmore.

“After 13 years of bad government and weeks of lying to the Irish people, the unprecedented decision taken on Sunday effectively represents the handing over of the deeds of the country to the EU and the International Monetary Fund (IMF). It is essential that we have a new government elected as soon as possible.”

Fianna Fail backbenchers have also urged Cowen to go. “At this stage the country has lost faith in him, and I think it needs a new opportunity”, said Kildare TD Sean Power.

Austerity plan to hit poor, students, pensioners, services 

November 24, 2010 – Irish Republican News – The Dublin government today unveiled a raft of budget measures it claimed would restore the 26-county state's finances by 2014, but fudged key facts and figures on how it would affect the public. Six billion of the total fifteen billion euro taxes and cuts will be implemented next year, if the annual budget in December is passed by the Dublin government.

Measures include cutting social welfare by 3 billion euro, reducing the public sector pay bill by 1.2bn euro and increasing VAT by 2%. The minimum wage is to be cut by 1 euro to 7.65 euro.

The plan will also draw more workers into the income tax net. By 2014 anyone earning 15,300 euro will start paying tax, down from the current level of 18,300 euro.

The plan has received the approval of the International Monetary Fund and the European Central Bank, who are continuing to negotiate th conditions of an 85 billion euro bailout for the crashed 26-County economy.

Speaking at Government Buildings, 26-County Taoiseach Brian Cowen said the current crisis was "a challenge that can be surmounted." "We are a smart, resilient, proud people and we are going to come through this challenge", Cowen said.

The Taoiseach responded to a call by the Green Party for a general election to be held by January, said that he accepted that an election would be held following the enactment of the budget legislation, due by March – but he refused today to give an indicative date.

Speaking alongside Minister for Finance Brian Lenihan and Green Party leader John Gormley, Cowen said his focus was now on securing the stated cuts and taxes.  He the state would have to "take some steps back to go forward again".

The budget roadmap includes:

• Public sector workforce to be cut by almost 25,000 to 24,750, bringing staff numbers back to 2005 levels; - Student fees will increase by 33%; new cuts in student grants;

• Water metering will be brought in by 2014;

• Interim flat property tax to start at 100 euro, increasing by 2014;

• Carbon tax charges will double to 30 euro a tonne;

• Unspecified reductions of social welfare to save 2.8bn euro;

• A billion euro to be raised in taxes and deductions on pensions;

• 10% pay cut, reduced pension scheme for new public sector entrants;

• Current public workers still covered by Croke Park Agreement;

• The minimum wage is cut by 1 euro to 7.65 euro;

• VAT will increase 1% to 22% in 2013 and to 23% in 2014;

• Corporation tax will remain at 12.5%.

The National Recovery Plan stated, published today, said:

The Plan will help dispel uncertainty and reinforce the confidence of consumers, businesses and of the international community. The tax and expenditure measures contained in this Plan will negatively affect the living standards of citizens in the short term.

But postponing these measures will lead to greater burdens in the future for those who can least bear them, and will jeopardise our prospects of returning to sustainable growth and full employment.

The state' cost of international borrowing rose to record levels this morning on bond markets, and remains just under 9% this afternoon.

Sinn Fein activists held a protest on Merrion Square in advance of today's publication of the coalition's four year plan.

Speaking ahead of the publication today Sinn Fein TD Aengus O Snodaigh said, "The Government has no mandate or authority to bring forward this year's budget, never mind a budgetary plan for four year."

The four Sinn Fein TDs yesterday tabled a motion of no confidence in the Taoiseach.

Sinn Fein Dail leader Caoimhghin O Caolain called on all those in the Dail opposed to Brian Cowen's leadership to vote no confidence in him.

"This Dail should have been dissolved by the Taoiseach last night. Brian Cowen no longer commands a majority in the Dail. He should now put the issue to the test and allow a vote on the motion of no confidence which has been tabled by the four Sinn Fein deputies.

"Are we to continue with this charade which is an insult to the Irish people? They are being denied a democratic choice because Fianna Fail and the Greens want to put the people in the straitjacket of a savage and regressive budget, a four-year plan and an IMF/EU loan before a general election.

"Brian Cowen and his government should go and go now." 

Unions gear up to resist IMF cutbacks

By Tom Mellen

November 21, 2010 – Morning Star – Irish trade unionists voted on November 20 to launch a campaign of civil disobedience if Taoiseach Brian Cowen's "negligent" administration fails to call a general election.

November 20, 2010 – Socialist Unity – Sinn Féin finance spokesperson Arthur Morgan TD launched his party’s pre-budget submission in Dublin (to download a PDF version of the document click HERE).

The Sinn Féin policy has three key components. First, is to shift the burden of taxation from the poor to a rich in a series of measures including higher income and wealth taxes for higher earners and the rich. Second, reform of the tax system in what the party calls a "financial stimulus" to redistribute incomes towards the poor and low paid. But the largest component of the policy is a €7.5 billion government investment package in infrastructure and other areas such as early childcare, which is estimated to create 160,000 jobs. This would go some way to addressing the collapse in investment which more than accounts for the entirety of the Irish recession.

Sinn Féin's plan is to cut the deficit by over €4.5 billion and invest in a €2 billion jobs stimulus in 2011 while protecting frontline public services and those on low and middle incomes. Sinn Féin proposes a range of taxation measures aimed at high earners, the abolition of wastages in public spending and the transfer of €7 billion from the National Pension Reserve Fund for a 3.5 year state wide investment programme to stimulate the economy and create jobs.

The document, entitled There is a better way, is fully costed and endorsed by independent economists.

Speaking at the launch Morgan said:

Included in Sinn Féin’s revenue raising proposals is a new 48% tax on incomes in excess of €100,000 raising €410 million, the standardising of all discretionary tax reliefs at the lower rate raising €1.1 billion, an income linked wealth tax of 1% on all assets worth more than €1 million excluding working farmland raising €1 billion and increases in Capital Gains Tax, Capital Acquisitions Tax and DIRT.

We are also calling for the abolition of a number of tax exemptions including mortgage interest relief for landlords, property tax reliefs and income tax and PRSI exemptions for share options.

We propose to cap ministerial salaries at €100,000, TDs at €75,000 and Senators at €60,000. Similarly we call for a cap on the maximum salary in the public service at €100,000.

All of our revenue raising proposals are aimed at those in our society who can afford to pay more and if implemented they would raise €5.266 million.

With this Sinn Féin would put €595 million into a financial stimulus plan and use the remaining €4.671 billion to reduce the deficit.

We would then take €7 billion from the National Pension Reserve Fund for a three and a half year state wide investment programme to stimulate the economy and create jobs, €2 billion to be spent on shovel ready projects in 2011.

We would then reduce the remainder of the deficit through increased economic growth generated as a result of our economic stimulus plan. We are confident that the deficit can be reduced to the stability and growth pact level by 2016 in a progressive manner while growing the economy.

éirígí: IMF will entrench the economics of the madhouse

November 20, 2010 – Introducing the catastrophic €400 billion [£340 billion] blanket bank guarantee scheme in September 2008, Twenty-Six County [Ireland's]  finance minister Brian Lenihan was keen to offer reassurance to those genuinely fearful of the consequences of such economic recklessness.

“There is”, he intoned, “understandable concern that the exchequer is potentially significantly exposed by this measure. I want to reassure the House and the Irish people that this is not the case.” The arrival this week of International Monetary Fund representatives’ in Dublin amply demonstrates the hollowness of Lenihan’s reassurance.

This was the same minister who, at various points throughout this crisis, suggested that the economy had “turned the corner” was “on the road to recovery” and who offered further reassurances that the bank bailout was “the cheapest bailout in the world”. Reckless incompetence coupled with a stout defence of the interests of Fianna Fáil’s financial backers, the bankers and developers, has been the hallmark of Brian Lenihan’s tenure as minister of finance. It is an office that, in recent times, has seated some notable proponents of crony capitalism: Brian Cowen, Bertie Ahern and Charlie McCreevy.

Well, it seems now that the cheapest bailout in the world has not only cost the Twenty-Six County state over €50 billion [£43 billion] and rising, but has driven tens of thousands of workers onto dole queues, exposed its citizens to the vagaries of international financial markets and has now resulted in the state surrendering its sovereignty to the IMF.

Having already imposed swingeing cuts to the public sector, the Dublin government confirmed last week that it intended cutting a further €15 billion [£13 billion] from the Twenty-Six County economy over the next four years, with €6 billion [£5.1 billion] of these cuts to be implemented in next month’s budget. It is this slavish adherence to free-market ideology which has created a deflationary spiral in the economy, resulting in massive unemployment, currently at 13 per cent, and once again raising the spectre of emigration.

In order to save the failed banking system and bail out bankers and property developers, the Dublin government intends driving tens of thousands of households into penury. The McCarthy Report, published in July 2009, has provided the template for the Dublin government’s program of cuts. Right-wing economist Colm McCarthy presented Leinster House with a wrecker’s charter that proposed the effective dismantling of the public sector, the imposition of savage pay cuts on public sector workers, swingeing cuts in social welfare payments, increases in taxes on low paid workers and the privatisation of state assets such as the ESB and Bord Gáis. It is a charter that will be grist to the mill of the IMF, an organisation well versed in the economics of the madhouse.

Originally established following the ending of the Second World War, the International Monetary Fund came about as part of the Bretton Woods agreement, its primary role at that time to provide short-term loans to states experiencing funding shortages and to manage the gold-standard currency valuation system. However, in recent decades the IMF’s role has been to provide long-term loans primarily to developing countries in return for the enforcement of ‘market discipline’ on vulnerable economies.

Its neoliberal mania has forced governments across the developing world to prioritise debt servicing and the imposition of savage public spending cuts and widespread privatisation. Its legacy has been the impoverishment of millions and the prising open of economies to allow vulture capitalists to profiteer from the sell-off of state assets.

IMF

The neoliberal doctrine promoted by the IMF played a notorious role in the Asian economic crisis of the late 1990s. The IMF encouraged developing economies in Asia to remove capital controls in the early 1990s, a decision which resulted in billions of dollars of speculative investment flowing into the Asian economies. However, when panic hit in the summer of 1997, the absence of barriers to capital control witnessed the outflow of approximately $100 billion from the economies of Indonesia, the Philippines, Thailand, Malaysia and South Korea in a matter of weeks. The subsequent imposition of so-called structural adjustment programs, which enforced public spending cuts, resulted in spiralling unemployment and drove millions deeper into poverty.

In more recent times, the IMF has imposed severe austerity programs in Europe. The €7.5 billion [£6.4 billion] loan offered to Latvia in 2008 was conditional on the imposition of a significant program of cuts that included: 20 per cent public sector pay cuts, staff cuts of between 10 and 15 per cent in government departments, the closure of schools and hospitals and an increase in fees for third level education.

Earlier this year, Greece was forced to accept an IMF/EU loan of €110 billion [£94 billion], which again came with austerity measures attached. These measures included an increase in the age of retirement from 63 to 67, swingeing cuts to public spending and public sector pay, alongside the privatisation of public services and state assets. However, the imposition of this austerity program has driven the Greek economy into a deep recession; it is estimated that the economy will contract by 4.2 per cent this year and by 3.0 per cent in 2011, while unemployment has soared to over 12 per cent. It is increasingly clear that the austerity medicine is actually killing the patient.

This is the scenario facing the population in the Twenty-Six Counties. However, it should be emphasised that the Fianna Fáil/Green Party coalition and the so-called opposition parties in Leinster House are willing partners in the imposition of austerity measures; acquiescing in the EU demand for a reduction in the budget deficit to three per cent of GDP by 2014.

A consensus has been reached amongst the political establishment that the working class should shoulder the burden of a global capitalist crisis, one that has been exacerbated in Ireland by the decision to offer a blanket guarantee to the private banking sector. No amount of establishment hand wringing or wailing about the loss of sovereignty should diminish their culpability in the destruction of the economy and the impoverishment of the working class.

That said, the interference of the IMF into the affairs of the Twenty-Six County state is a serious development and should be resisted at all costs. It is an affront to democracy that this organisation, which has wrought misery and devastation upon nations across the globe, should be allowed dictate the affairs of a section of the Irish people. The IMF is an undemocratic and unaccountable enforcer of the neoliberal doctrines of the small state, of deregulated markets and of privatisation. It has no constructive role to play in the affairs of the Irish people and will simply enhance the dictatorship of the markets.

While the IMF sets about driving the working class into penury, the rich in Ireland will be encouraged to invest their vast wealth into purchasing our public assets. The sell-off of state companies such as ESB will be encouraged by capitalist parasites such as Denis O’Brien, Michael Smurfit and Peter Sutherland, who will seek to make billions on the back of the privatisation of these state assets. There is no doubt but that the economic crisis and the IMF takeover will be used to create a further boon for the wealthy, an elite that continues to control wealth in excess of €120 billion [£103 billion].

The Irish Congress of Trade Unions has called a rally for November 27. It is to be hoped that this is the beginning of a serious fight-back by the trade union movement in Ireland, whose leadership to date has failed utterly to respond to the establishment war being waged on the working class.

A sustained campaign of resistance is required to drive the IMF out of Ireland and Fianna Fáil out of office; to halt the planned savage program of cuts and to appropriate the vast wealth currently in the hands of a tiny class of pilferers. The calling of a general strike by the trade union movement is a necessary step in commencing the fight back.

Socialist Democracy: A colony one again, this time under the heel of the European Bank and IMF

By John McAnulty

November 18, 2010 – Socialist Democracy – Some sense of the convulsion gripping Ireland today is given by the editorial in the leading bourgeois journal, the Irish Times – an editorial made even stranger by the paper’s past support of Irish historical revisionism and the advancement of a post-nationalist argument that dismissed the whole idea of self-determination for Ireland and for her people as an issue in the modern world.

(Is it this that the men of 1916)…. died for: a bailout from the German chancellor … Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund. Their representatives ride into Merrion Street today….

The current crisis was provoked by the collapse of Irish capitalist strategy on September 30 and the acceleration of the pace of collapse into chaos following remarks by Angela Merkel, the German chancellor, at the Seoul G20 summit.

The initial strategy of the Dublin government was always insane. Ireland's economy is a dependent one and Irish capital has only one strategy – subservience to transitional capital. In order to reassure the bond market the government gave a cast-iron guarantee to its own decayed banks and to the major European banks who provided the money. The solution was the effective nationalisation of the failed banks, the creation of a bad bank, NAMA, and massive austerity, driving down wages, jobs and services. The mixture was seasoned with the support of the trade union leadership, who demanded a "better fairer" way of paying the banks while remaining in social partnership with the government. The final decoration for this concoction was a massive dose of lies that consistently underestimated the levels of bad debt within the Irish economy. 

The whole edifice came crashing down on "Black Thursday", September 30, when something approaching the true size of the bank bailout was revealed. A strategy aimed at assuring the bond market that every penny would be screwed out the working class began to work in reverse when the size of the debt grew past the point where it became a plausible strategy. The interest on Irish debt grew to over 9% and effectively Ireland was bankrupt.

Speaking in Seoul, where she is attending the G20 summit, German chancellor Angela Merkel said in response to the Irish difficulties:

We cannot keep constantly explaining to our voters and our citizens why the taxpayer should bear the cost of certain risks and not those people who have earned a lot of money from taking those risks.

The strategy of Irish capital descended to farce. Merkel had no supporters in the Irish government. The idea that Irish capital would not squeeze workers of the last drop of blood was greeted with horror. Minister for Finance Brian Lenihan welcomed supportive comments from Britain, France and Germany. Lenihan promised to unveil a four-year program of austerity measures ahead of the budget in December. This will involve doubling a savage cut of €3 billion to €6 billion and a €15 billion "correction" over the four years.

The minister said: "Our EU partners have confirmed their full confidence in the budgetary strategy being pursued by the Government. It is imperative that next month's Budget be passed in the Dáil."

The Irish government believed that by giving an absolute guarantee to bond holders it could placate the market. Now it finds that it is the sheer implausibility of that promise that is bringing it down. It boasted that there was no need to borrow money anyway until 2011. It was the strategy of Micawber – the hope that something will turn up. From that point on control of the economy began secretly to shift to the European Central Bank (ECB). 

The growing Irish crisis has consequences for Europe. If Ireland might  be unable to meet the bill then other weak economies might also default and this is reflected in the rising interest rates they are charged, thus twisting the spiral of crisis further. The ability of the European powers to handle the crisis is called into question and the euro weakens. When Merkel called into question the central tenet of Irish policy the pace of events accelerated. Merkel was swiftly corrected by the major European powers who indicated that it was simply a proposal that at some point in the future gambling in property speculation might not always guarantee a 100% return for the major banks. In any case it was a statement steeped in the rankest hypocrisy. Many of the bondholders depending on their pound of flesh are in fact the German banks whom Merkel represents. But by then the damage was done and panic turned to rout.

The imperialist strategy in their new Irish colony is to provide sufficient funds from the ECB to calm the fears of the market and then to embark in a huge experiment to see how much can be sucked out of the Irish economy over and above the astronomical proposals already in place. It is likely that many of the proposals will be drawn from the Greek experience, even though it itself shows signs of failure and has not seen a return of stability.

Conditions will include the reform or outright cancellation of welfare programmes, privatisation of state assets, cuts in capital spending, an immediate increase in the value-added tax (VAT, Irelands indirect consumption tax) and a widening of the VAT base, increases in excise duties, and a widening of the property tax base. Public pensions will include the linking of the retirement age with changes in life expectancy, cuts in the highest pensions, the changing of the base upon which public sector pensions are paid so that they are linked to average lifetime earnings, the lowering of the ceiling on pension payments and the restriction of access to early retirement. Perhaps the most dramatic effect will be in the speed with which standards of living are driven down and the speed with which assets are stripped out of public and semi-state bodies.

Perhaps the biggest weapon that the capitalist have in their armoury is the connivance of the trade union leadership in the general strategy of capital, hidden behind a layer of bombast. 

The Irish Congress of Trade Unions is to hold a major national demonstration on November 27 in Dublin in protest at existing budget proposals. David Begg, the ICTU secretary, said; "Congress believes there is a better, fairer way to do this … Simply put we need to extend the period of adjustment and focus on jobs and growth.” 

In other words we should take longer and spend more on undefined investments – a crazy scenario when the effect of a longer borrowing time would be to add billions more in interest charges and when an investment strategy demands that we borrow even more at a time when the crisis amounts to an inability to borrow any money at current interest rates applied to Ireland – this in a context where the ECB will be setting the targets and the Dail will be totally irrelevant!

There has been a protracted tussle between Europe and the Irish government when they wriggled to avoid the loan. The reason for the dispute is simple. The offer that Ireland can't refuse is meant to protect the euro, not Ireland. It will increase Ireland's debt and freeze it for years in special measures even more extreme than the unprecedented cuts proposed already.

So there are enormous political risks for the Irish capitalists:

• There is the enormous loss of face and political authority involved in the return of the country to the status of a colony.

• There is the loss of the power of nationalism -- a big element in defusing resistance is claims that "we are all in this together" and that "we must stand together to save the country".

• The nationalist ideology underpins the social partnership with the trade union leaderships. Will they be able put forward a program of collaboration with the IMF?

• Above all the Irish capitalists fear a call from Europe for a fairer tax regime. They are convinced that the past success of the Celtic Tiger can be explained by a policy of setting a 12.5% rate of corporation tax. If they are forced to levy at the European average they fear that the basic assumption of their strategy – that austerity now will be rewarded by a return of the good times – will unravel and they will be swept away in the ensuing explosion.

The genie will not be put back in the bottle. Angela Merkel, the leading representative of European imperialism, can (at least for a few hours) wag her finger at the bondholders. The dependent representatives of the Irish neocolony cannot. The trade union bureaucracy, joined at the waist to Irish capital by decades of social partnership, cannot. Yet Irish capital is doomed if it does and doomed if it doesn’t. The bill is too big to pay. Even if Ireland receives a European bailout the question remains. How is it to pay the bailout?

Interventions by the European Central Bank and the IMF presume some failure by native capital and the ability of outside agencies to impose harsher austerity. This is not the case here. Irish capital has done everything it can to wring salvation from the hides of the workers. The austerity can be made harsher, but that is likely to lead to complete collapse. ECB and IMF intervention merely increases the pressure on the weaker European economies, calls into question the stability of the euro and of the European project itself. Given the absolute failure of the Seoul conference to achieve agreement and head off global currency wars, there is no government in Europe that can feel safe.

Irish workers can cut the Gordian knot. Don’t pay! Repudiate the debt! It’s not our debt! We’re not “all in this together”.  Close the dud banks – seize the assets of the speculators – set up a workers' bank to manage the real economy. What have we to lose?

We will find ourselves at war with the bond market, but they have already declared war on us. The proposal of an independent capitalist Ireland put forward by the majority of the 1916 rebels ran its course on November 18, 2010. We need a new declaration of independence – the declaration of freedom from capital. Irish workers, struggling for freedom, can link up with the vast mass of European workers and oppressed who find themselves standing a short distance behind on the road we are on and struggle for a free Ireland in a United Socialist States of Europe, a beacon of hope to the entire world.

We lack one thing – self-organisation – the organisation of the working class in its own interests. That means a hard struggle against the crooks and shysters to claim to lead us. That struggle cannot be avoided.

Socialist Party: The socialist alternative to IMF/EU diktats

By Mick Barry

November 19, 2010 – Socialist Party (CWI Ireland) – The capitalist media say that there is no alternative to the thrust of the economic policies being advanced by the government, the EU and the IMF. This is completely untrue. There is an alternative – a socialist alternative.

Shut down the Anglo Irish Bank

The bailout of Anglo Irish Bank is set to cost the taxpayer between €29.3 billion and €34.3 billion according to the government and up to €40 billion according to some economists. The bank should be closed down immediately and the losses should be taken by bondholders, private banks who lent to Anglo and wealthy depositors. The same applies to the Irish Nationwide Building Society.

Nationalise the banks under the democratic control of the working people

AIB, Bank of Ireland and other banks should be nationalised. The banks should be amalgamated into one state bank with jobs guaranteed and employment provided for Anglo and INBS staff. The boards should be sacked. A new board under the democratic control of working people should be established including elected representatives from the workplace and representatives elected from society as a whole.

End the bank bailouts which could end up costing as much as €90 billion – redirect this investment to job creation and protecting social services. Bondholders and private lenders from the banking world should be given no guarantee of repayment. The bank should gear its resources and future profits towards reducing mortgages (all mortgages should be brought in line with current house valuations), defending jobs and providing cheap credit to small business and individuals.

For an emergency program of socially useful public works

Under capitalism schools are unbuilt, communities are left without centres, health, sport and youth facilities and masses of homes are uninsulated at the same time as huge numbers of construction workers languish on the dole. End this contradiction by launching a socially useful program of public works to employ construction workers at trade union rates of pay.

For a 35-hour work week without loss of pay

It makes no sense to have people working 39 hours a week plus overtime at the same time that 450,000 people are on the dole. Cut the working week to 35 hours without loss in pay and share out the work among the unemployed. This would create 165,000 jobs. It costs an average of €20,000 per annum in dole payments and lost income tax revenue to keep a person unemployed for a year. Measures which take a quarter of a million people off the dole could save the taxpayer up to €5 billion and this money should be used to finance the emergency programme of socially useful public works.

For a progressive tax system

33,000 Irish millionaires own €133 billion wealth. The taxation system should be changed, not by bringing the lowest paid into the tax net, but by forcing this elite to pay their fair share. A hefty wealth tax should be introduced; tax loopholes for the rich abolished and corporation tax significantly increased. No to property tax on the family home and to water charges.

Abolish sky-high pay rates for elite

The Taoiseach [prime minister of Ireland] is paid €228,000 per annum. A government minister is paid €191,000 per annum. A Supreme Court judge is paid €257,872 per annum. These sky-high wages and others should be abolished along with perks such as the ministerial car fleet. This should be done, not to "set an example" to encourage ordinary people to accept austerity, but to strike a blow at a viciously unequal capitalist society.

Reverse the cuts

Not only are massive cutbacks an assault on the "social wage", striking hardest at working people and the poor, they are also severely deflationary with the potential to cripple the economy as pointed out recently by the ESRI. Every €1 billion in cuts is estimated to shave €500 million off economic growth for the following year. Use the new tax revenues accruing from the introduction of a progressive tax system to stop the flow of cutbacks and reverse all the cuts of recent years.

No to privatisation

The author of the An Bord Snip Nua report, right-wing economist Colm McCarthy, has been put in charge of a review of state assets and this is, no doubt, a prelude to proposals for privatisation on a massive scale. It makes no sense whatsoever to privatise when the private sector is responsible for the crisis in the first place. We need more nurses, teachers, doctors and social workers. Public sector employment should be increased not cut!

End the rule of the market

Capitalism has failed spectacularly – 450,000 on the dole, a banking disaster and €15 billion in cuts on the way. If capitalism cannot afford to provide jobs, decent living standards, decent social services and a future then the working class cannot afford capitalism. This system needs to be ended.  Nationalise the banks, the building industry and all the major companies which dominate the economy under the democratic control of working people and use their profits to meet the needs of the people.

For a socialist plan of production, in Ireland and internationally

Gear the economy towards meeting the needs of ordinary people not the superprofits of the capitalist elite. Match unused resources with social need – e.g. finishing "ghost estates" to tackle massive social housing waiting lists. Instead of bailing out banks use state funding and state industry to end unemployment.

End the rule of capitalism internationally and the power of unelected financial "markets" to bully millions of people, and entire countries. For a socialist Europe instead of a capitalist European Union. Instead of the anarchy of the market with its catastrophic rollercoaster of boom and slump, plan the world economy rationally to end poverty, starvation, mass unemployment and vicious social inequality.

[Mick Barry is an Irish Socialist Party councillor for Cork City Council, first elected in 2004 and re-elected in June 2009.]

Communist Party of Ireland: The EU and the IMF are the determining forces

Statement by the Communist Party of Ireland/Páirtí Cumannach na hÉireann

November 23, 2010 – This government, like the Irish economy, is holed below the water line and is sinking. The life raft being constructed by the EU and the IMF is not designed to solve the deepening problems facing our people but only to save the rich and powerful, in particular the German, French and British banks, as well as the euro.

The IMF-EU policies will not only not solve our problems but can only make them worse. Around the world there is vast experience of the consequences of the imposition of the policies of the IMF. It has left a trail of destruction, with hundreds of millions of lives driven into abject poverty and hunger. It has taken decades for countries in Latin America to recover from the ravages of the policies imposed on them by the IMF, and it is only by rejecting those policies that any recovery has been achieved. Much of the improvement in the last decade is due to the emergence of radical governments committed to putting the people first and not the banks and finance houses.

It is clear that all the main political parties are content to allow the EU and IMF to decide the future of our people and the destiny of our country. They have all agreed, to a greater or lesser extent, that whatever the European Union wants and needs for Ireland they will comply.

Unless there is a radical political departure and the development of a people’s alternative economy, tens of thousands of people will leave our country, while tens of thousands more will will be driven into poverty. None of the main political parties has anything to offer that will be different from what this Government is prepared to implement. All the talk from Fine Gael and the Labour Party of alternatives and renegotiating with the EU and IMF is just hot air and more election promises. The EU and the IMF are not negotiating, they are ordering, and they are sure of an obedient Government, as long as there is no strong popular movement in defence of the people’s sovereignty.

We know what to expect from Fine Gael, and to hold illusions that the Labour Party will do anything different, other than be obedient to the needs of big business and the EU, we need look no further than the role of Blair in Britain and Schröder in Germany and now Papandreou in Greece to see how Labour governments carry on with the programme of the Conservatives.

The trade union movement needs to break with its present dead-end approach and to begin to act independently and develop its own political demands. Working people can no longer afford to remain passive but must become an independent political force and not be subsumed into mere voting fodder.

A good starting point is to call for the repudiation of the debt. It does not belong to the people.