From Socialist Voice, January–February 2009

More of the same

The new year started much as the old year finished, with the economic forecast looking pretty bleak. The Government bank guarantee has not had the desired effect, with bank shares dropping to less than the price of a bar of chocolate. The bail-out and bringing into state ownership of Anglo-Irish Bank was a measure of desperation by a Government that has no clear idea of the extent of the growing economic crisis enveloping our country.
     Unemployment is now about 8 per cent, according to figures for December issued by the Central Statistics Office. FÁS is predicting that unemployment will increase to 12 per cent by this time next year.
     In December the Economic and Social Research Institute predicted that unemployment would rise to 10 per cent in 2009, while some establishment economists are predicting that it will be 15 per cent by January 2010. This would mean 420,000 people on the dole, compared with approximately 300,000 last December.
     The building industry bosses are predicting that their industry, worth €38 billion in 2007, or 24 per cent of gross national product, may well fall by more than a half, to as low as €14 billion, by the end of 2010. Direct employment in the industry is expected to fall from 255,000 in late 2008 to 135,000 by the end of 2010.
     Brian Cowen has acknowledged that the Government is going to have to find €15 billion in cuts over the next five years, beginning with €2 billion to reduce this year’s estimated deficit of €20 billion. The Government is borrowing nearly €50 million a week to fill in the hole in revenue to meet current spending targets.
     It has just emerged that another massive bill in the form of grants owing to farmers for the farm environment improvement scheme, totalling €400 million, is now due. This was not acknowledged in the budget, nor had the Minister for Finance alluded to it.
     The nationalisation of Anglo-Irish Bank is not for rescuing working people’s savings but rather for bailing out the big investors in the bank, who were getting a big return from the massive speculative investments financed by the bank being made by some of the biggest property-developers, many of whom are providing the money to keep Fianna Fáil going.
     These profiteers speculated not only on the Irish property market but right across the world, from Shanghai to New York. Irish workers are now being asked to go guarantor for these speculative debts. Public money is being used to bail out the property speculators, the big depositors in the bank, and Fianna Fáil, which politically represents them.
     Two of the directors of Anglo-Irish Bank between them borrowed more than €170 million, with the bank’s auditors, its board of directors, the Banking Regulator and the Revenue Commissioners all blindly unaware of such a major hole in the borrowing side of the ledger. The top brass of this bank clearly saw the bank as a personal piggy-bank for dipping into when they needed money.
     Not one person has been investigated, few if any questions have been asked, and all is sweetness and light. Irish workers will pick up the bill.
     The remaining banks now totter on the brink, as they are unable or unwilling to come clean on the extent of toxic debt on their books. Sections of the establishment want the now state-owned Anglo-Irish Bank to be turned into a toxic bank and for all the toxic loans from Irish financial institutions to be dumped there.
     What the politicians, bankers and speculators want is to shed their responsibilities regarding the massive debts and to place them firmly on the back of the Irish state, and so on Irish workers. The Golden Circle have circled the wagons to ensure that their wealth is protected.
     As the banks gear up to shed hundreds if not thousands of jobs, the flight of transnational corporations continues, with the announcement that Dell is to shift part of its manufacturing and assembly to Poland and to lay off hundreds of workers. Waterford Wedgwood is to close, with hundreds of skilled jobs being lost as glass production shifts to the Czech Republic.
     A similar story is repeated throughout the North of Ireland, with job losses announced daily.
     For nearly four decades the Irish political establishment has actively ceded more and more power and control over vast areas of public policy, in particular in relation to economic controls, to the EEC and European Union.
     The only policy options open to the Government are to control public spending by cutting both the numbers employed in the public sector and their wages, reducing the terms and conditions of the remaining public-sector workers, or options in relation to taxation, as we have relinquished control over fiscal policy, interest rates, and the value of the currency—all determined by the European Central Bank, which in turn is controlled and its policy shaped by the needs and interests of the big powers at the heart of the European Union, in particular Germany.
     There has been a determined and orchestrated campaign in the establishment media—in newspapers, on radio and on television—to assert that there is no other way forward. Without a doubt the Government and employers are massaging the budgetary figures to paint the picture as bleak as possible in order to secure the maximum concession from workers and their unions.
     The Government and the employers’ organisations in using the mass media are attempting to use the crisis to achieve a number of strategic goals: (1) to undermine existing wage levels, (2) to radically reverse the terms and conditions of workers in both the public and the private sector, (3) to undermine and if possible to break and divide the trade union movement, using public-sector against private-sector workers, (4) to reduce and reverse the advances made in relation to the provision of public services, and (5) to manipulate public opinion into accepting that an assault on state benefits is necessary.
     We have to resist each and every attempt by this Government and the rich cabal of the Golden Circle in their efforts to make workers pay for the growing crisis. The defence of the public sector is the defence of gains fought for and hard won by generations of workers.

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