“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
For revolutionary solutions to create a sustainable, not-for-profit economy in place of global capital alongside a real democracy based on People’s Assemblies. Visit our web site at www.aworldtowin.net
Showing posts with label Ireland. Show all posts
Showing posts with label Ireland. Show all posts
Tuesday, November 23, 2010
Wednesday, October 27, 2010
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
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
Wednesday, March 31, 2010
Something's got to give
Economic storms continue to batter countries throughout Europe as their governments struggle vainly to keep their heads above the tsunami of debt.
After weeks of wrangling among the eurozone countries an agreement was reached on a support package staving off state bankruptcy for Greece and the collapse of the euro. Backing from the International Monetary Fund and the European Central Bank was judged sufficient for the country’s government to return to selling its debt on the international bond markets to raise the cash needed to fund its monumental deficit.
But international investors are yet to be convinced by the Greek government’s ability to impose its programme of further austerity measures on its unwilling population. The 5.9 per cent interest payments needed to attract buyers for its latest €5 billion issue turned out to be much higher than was hoped for.
Meanwhile, on Europe’s western extremity, Ireland’s National Asset Management Agency began operations yesterday as the country’s “bad bank”, buying up the “impaired assets” that litter the country in the wake of the global financial meltdown and continuing recession.
NAMA is just one part of the Irish government’s attempt to steady its economy, which has suffered the most severe contraction of any industrialised country: the value of annual national output shrank by a cumulative 12 per cent in the three years to 2009.
The basic idea is that NAMA will buy up the banks’ bad debts and valueless property, in the process cleaning up the economy so that those left standing can return to the old game of turning a profit.
But there were shocks in store when NAMA announced the scale of the operation. It has counted up the face value of the toxic debts in the economy and arrived at a figure of €81 billion, which is equivalent to almost half the total value of all goods and services produced in the country in 2009.
The new agency is highly experimental. Nobody knows if what it is supposed to do will work. The terms of its first round of purchases stunned the markets. It is buying property-based loans with a book value of €16 billion. But NAMA has the power to set its own price, and it has awarded itself a discount of 47% based on the current market value. The agency is set to become the owner of hundreds of pubs, empty office blocks, abandoned shopping centres and acres of unused farmland, as well half-finished housing projects abandoned by bankrupt speculative builders.
As part of the deal, the newly state-owned Irish banks are required to restock their capital balances after years of floating on thin air. They are €32 billion short, so they’ll have to sell off their valuable assets in the US, the UK and Poland. This action will reverberate throughout the world.
In the meantime just like Greece, Portugal, Spain, the UK the US, and a growing list of countries facing up to state bankruptcy, Ireland has to set about reducing its budget deficit which is the second largest in the eurozone after Greece’s. Something’s got to give - and it is already. The British state is apparently preparing for emergency political measures in the event of a hung Parliament after the upcoming general election to prevent a run on the pound. We'd be well advised to prepare for all eventualities ourselves.
Gerry Gold
Economics editor
Friday, October 03, 2008
Celtic Tiger defanged
With unemployment rising by over a third in the last year as recession bites in and with a national debt of €45 billion, the Irish government is guaranteeing the bank and building society deposits to the tune of a staggering €400 billion. That’s equivalent to €100,000 for each man, woman and child!
Just don’t call it nationalisation for heaven’s sake. it is merely a temporary measure to “restore balance to the economy” amid assertions that the banking system is still fundamentally sound. This aid guarantees the banks for just two years after which time they will have to pay it back and taxpayers will be remunerated, or so they say.
This emergency action by finance minster Brian Lenihan on behalf of the government is not original, it is not sensible and will probably be disastrous in the longer term. But such considerations have never stopped neo-liberal administrations from protecting the interests of profit-generating capitalist concerns in the past and they’re not stopping them now.
The €400 billion seems a vastly disproportionate amount of money, to put it mildly, for a country with a population of just over 4 million that, geographically speaking, would leave barely a ripple if it were to be dropped into Lake Michigan. But after a decade of burgeoning growth with property prices in particular being wildly over-valued, driven largely by lending institutions dishing out mortgages at several time the incomes of putative buyers, and with property developers and speculators given free rein to overheat the whole economic pot to such a degree that when the inevitable boiling point arrived, emergency temperature regulation seemed the only solution.
The Celtic Tiger is being defanged and it hurts. It all began when our old friend “sub prime” crashed the party last year and began to bring the festive house of cards tumbling down. But there’s worse to come because American investment in both the South and the North of Ireland is immense. So large scale withdrawal by U.S. corporations which is now more than likely, will help to send the place reeling back to the bad old days of recession and high unemployment.
Memories of the “bad old days” in Ireland are still fresh despite all the recent glitter, and behind the optimism there was always the niggling anxiety that all the fevered consumption and all the short-termism would somehow, some day have to be paid for. The days of reckoning appear to have arrived. Or maybe not, because after all money is flooding into Irish banks already. Investors large and small in Britain are moving their assets to the six large Irish financial houses now in the process of being shored up. But now Greece, not exactly an economic powerhouse, has joined the bail-out stampede and is also “guaranteeing” deposits!
Back in Ireland meanwhile, as unemployment continues to rise and living standards fall there is nowhere else to go, for that old spectre and saviour, emigration, is now no longer feasible. The ocean of bad debt, economic downturn and subsequent recession washing over the U.K and the U.S. has seen to that.
The mood has been stoical on the whole, but people are getting angry and finally waking up to the possibility that there must be other ways out of the debacle. Minds are being concentrated, so now is a time like no other for the left to rise to the challenge and point out clearly all the ways capitalism has served the many so badly for the benefit of the few, and to demonstrate the numerous alternative and lasting solutions that have been developed.
Fiona Harrington
Just don’t call it nationalisation for heaven’s sake. it is merely a temporary measure to “restore balance to the economy” amid assertions that the banking system is still fundamentally sound. This aid guarantees the banks for just two years after which time they will have to pay it back and taxpayers will be remunerated, or so they say.
This emergency action by finance minster Brian Lenihan on behalf of the government is not original, it is not sensible and will probably be disastrous in the longer term. But such considerations have never stopped neo-liberal administrations from protecting the interests of profit-generating capitalist concerns in the past and they’re not stopping them now.
The €400 billion seems a vastly disproportionate amount of money, to put it mildly, for a country with a population of just over 4 million that, geographically speaking, would leave barely a ripple if it were to be dropped into Lake Michigan. But after a decade of burgeoning growth with property prices in particular being wildly over-valued, driven largely by lending institutions dishing out mortgages at several time the incomes of putative buyers, and with property developers and speculators given free rein to overheat the whole economic pot to such a degree that when the inevitable boiling point arrived, emergency temperature regulation seemed the only solution.
The Celtic Tiger is being defanged and it hurts. It all began when our old friend “sub prime” crashed the party last year and began to bring the festive house of cards tumbling down. But there’s worse to come because American investment in both the South and the North of Ireland is immense. So large scale withdrawal by U.S. corporations which is now more than likely, will help to send the place reeling back to the bad old days of recession and high unemployment.
Memories of the “bad old days” in Ireland are still fresh despite all the recent glitter, and behind the optimism there was always the niggling anxiety that all the fevered consumption and all the short-termism would somehow, some day have to be paid for. The days of reckoning appear to have arrived. Or maybe not, because after all money is flooding into Irish banks already. Investors large and small in Britain are moving their assets to the six large Irish financial houses now in the process of being shored up. But now Greece, not exactly an economic powerhouse, has joined the bail-out stampede and is also “guaranteeing” deposits!
Back in Ireland meanwhile, as unemployment continues to rise and living standards fall there is nowhere else to go, for that old spectre and saviour, emigration, is now no longer feasible. The ocean of bad debt, economic downturn and subsequent recession washing over the U.K and the U.S. has seen to that.
The mood has been stoical on the whole, but people are getting angry and finally waking up to the possibility that there must be other ways out of the debacle. Minds are being concentrated, so now is a time like no other for the left to rise to the challenge and point out clearly all the ways capitalism has served the many so badly for the benefit of the few, and to demonstrate the numerous alternative and lasting solutions that have been developed.
Fiona Harrington
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