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
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
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
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
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
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
“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
“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
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.
Technical Engineering and Electrical Union (TEEU) delegates meeting in
Galway for their biennial conference overwhelmingly passed the emergency
motion, which charges that Dublin's "savage and draconian" four-year
plan to take €6 billion (£5.1 billion) out of the economy in the next budget
amounts to "negligence in the management of the economy".
The Irish cabinet met on November 21 to rubber stamp a program of spending
cuts that is expected to be published early next week and will then be
followed by a loan from the EU and the IMF.
TEEU general secretary Eamon Devoy said that the cuts, which have been
endorsed by visiting officials from the International Monetary Fund,
European Commission and European Central Bank, were "unbearable" to most
people. "When the draconian measures being proposed are heaped on top of the
€14.5 billion (£12.4 billion) of cuts already implemented in the last three brutal budgets, life in Ireland will be unbearable", Devoy predicted. He warned that the fresh cuts would lead to deflation, more job losses
and "severe hardship" for working people and their families.
And Irish Congress of Trade Unions (ICTU) general secretary David Begg
told delegates that a government guarantee to banking bond holders was
"a terrible mistake" and the trade union movement would not "acquiesce
in the ruination of our society". Begg said that the ICTU was calling for a mass mobilisation in Dublin
on November 27 to "allow ordinary working people to voice their
opposition to a policy that could destroy 90,000 more jobs in the short
term and any prospect of long term prosperity".
Union concerns were underlined by University College Cork academics
David Humphries and Steve O'Callaghan, who said that the IMF and the EU
expect Dublin to take an axe to public sector pensions. "Both the IMF and the EU have been particularly ardent in their approach to cutting pension entitlements," they said.
Sinn Féin: `There is a better way'
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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.
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.