A new Irish sovereignty

“Instead of drums and trumpets, our little apocalypse was played out against the background noise of the Taoiseach and the Minister for Finance murmuring evasive and mechanical denials.”

Thus writer Fintan O’Toole, in the Irish Times on Ireland’s bail-out by the International Monetary Fund and the British government.

The 94 years that have gone by since Ireland’s legendary Easter Uprising against British imperial rule seem to have come full circle. Yesterday Chancellor George Osborne announced that the British government was offering Ireland a £7bn loan in addition to the £77bn being offered by the European Union.

A sorry end indeed to the symbolic significance of the Irish Free State as a plucky David to Britain’s Goliath. That state, for all its betrayals, came into being following the martyrdom of many hundreds of heroic fighters. O’Toole points to the sense of a “historic threshold being crossed” in the psyche of the Irish.

The IMF-EU-British bail-out pulls away the façade of sovereignty that has provided a legitimacy –however threadbare – for Fianna Fáil and Fine Gael, the political elites who have ruled the Irish Republic since the end of the civil war in 1923.
But the truth is that the Irish state lost sovereignty to its own banks and speculators a long time ago. And by reducing its corporation tax to 12.5%, they already handed over control to the corporations in the mid-1990s, just as they are now doing to the IMF and EU.

Taoiseach Brian Cowen and his Minister for Finance Brian Lenihan are presently using the word “sovereign” in a new sense. In the past, as O’Toole notes ironically, “The Sovereign” used referred to the British monarch, “and as such it touched the rawest of nerves in nationalist Ireland. As the two Brians used it this week, though, the phrase is market-speak for ‘sovereign debt’.”

“There is nothing abstract”, O’Toole says, “in the sudden reality of officials from the EU and the IMF poring over the books in Merrion Street and the prospect of all big decisions on Government spending and taxation having to be approved by those same bodies for years to come. A simple rule of thumb for a sovereign state is that it – and it alone – makes its own decisions about taxation and spending. For the foreseeable future, Irish governments will not pass this test.”

But it is not only Ireland that is being humiliated by the arrival of the IMF-EU financial police. Greece has already had the visit and the “contagion” also threatens Spain and Portugal as Jean Claude Juncker, Luxembourg’s prime minister and chairman of the eurozone finance ministers’ group, warned yesterday. And the European Union is already interfering with the Irish government’s decision to hold a snap election in December.

Chancellor George Osborne claims that Britain helping Ireland because it is ‘a friend in need’. In reality, though, smaller states are being swallowed up by larger states, themselves subject to the global financial system. This is not the reimposition of “direct rule” or the old British imperialism. Neither is it the British government bailing out the Irish government. It is in fact a loan by the British government to British commercial banks, who hold £140 billion worth of outstanding Irish debt in business and property loans. RBS says it will have about £10 billion in "impaired" Irish loans next year. Lloyds is expected to write off more than £1.6 billion. And the bottom line is that the taxpayer is once again bailing out the banking system.

The new overlords are the global financial institutions to which even the most powerful governments and states are increasingly subject. So much for the notion of the “sovereignty of the people”, which was the aspiration, not only of the Easter Uprising of 1916, but the democratic idea behind national independence in general.
Dublin satirist Morgan C Jones, one-sixth of the Emergency acting group, is calling for a citizens’ protest outside the government’s Leinster House with placards saying “You’re fired”. He’s right – the days of governments in thrall to the financial markets are numbered. Regaining sovereignty – in other words, the self-determination of people over their own destiny – is only possible by developing alternative economic and financial ownership and control.

A World to Win’s new booklet, Beyond Resistance, published online today, through its analysis of the crisis, offers real ways forward to achieving real sovereignty.

Corinna Lotz
A World to Win secretary

Race to the bottom

Ireland’s already severe economic troubles just got a whole lot worse.

Its plan to reduce its budget deficit to 3% of GDP in four years by cutting spending by €7.5bn has been undermined by lower growth prospects both at home and abroad and higher debt interest costs.

So, in a warning of what is to come elsewhere, Ireland’s Fianna Fail government has DOUBLED its programme of cuts to €15bn.

And this comes only days after the UK's Lib-Tory Coalition announced the latest details of its own savage assault on the public sector intended to hit a strikingly similar target.

You can almost feel the brutal threat contained within the official Irish statement:

‘The Government realises that the expenditure adjustments and revenue raising measures that must now be introduced will have an impact on the living standards of citizens. But it is neither credible nor realistic to delay these measures.’

And you can almost see the baseball bats wielded by the bailiffs sent in by the money marketeers who’ve driven up the price of borrowing for Ireland, and a long list of other highly indebted countries.

‘Our obligations are clear. We must demonstrate that we are bringing sustainability to our public finances. We must stabilise our debt to GDP ratio over the period of the Plan. And we must set out our strategy for returning our economy to growth.’

Things are getting rapidly worse for the millions of ordinary people already struggling to deal with the costs of debt repayments incurred when governments decided they had no option but to bail out the bankrupt banking sector in 2007 and 2008 and issued monstrous amounts of new credit in the hope that it would stimulate a ‘recovery’.

Despite better than expected growth figures for the UK in the last half year, its economy hasn’t even recovered half of the production it lost during the first part of the dive into its worst post war recession.

Meanwhile, the world economy is heading into a renewal of decline. Look at South Africa for example. Unemployment there is growing relentlessly beyond 25%. If the workers who’ve given up looking for a non-existent job are included the figure is over 36%. Whilst carmaker Ford has used its government bailout to slash production, sell off Volvo and cut its involvement with Mazda and returned to profit, parts of America have an official unemployment rate of 20%. And one person in five out of work is the official rate for the whole of Spain.

With profit-seeking capitalist society no longer able to offer jobs to so many people – and forcing governments to slash support for the unemployed – belief in the system is being undermined. It’s no wonder that the dream weavers are hard at work spreading the myth of a ‘return to growth and prosperity’. As increasing numbers begin to realise that the game is up, the need for a society that is based on need rather than shareholder returns becomes increasingly urgent.

Cameron has just delayed the details of the growth package that was expected to follow the biggest assault on public spending since the post war creation of the welfare state. Could this be an admission that there’s nothing he can do besides opening the way for a few thousand jobs in off-shore wind turbine manufacture?

It’s high time people – workers, students, farmers, pensioners, the unemployed, communities - formed new kinds of democratic forums and began to explore how to use them to take things into their own hands. As illusions that the system can provide for people’s needs is broken up, there is nothing to lose and everything to gain.


Gerry Gold
Economics editor