Zeitung vum Lëtzebuerger Vollek
Interview with Eugene McCartan
General Secretary, Communist Party of Ireland
The Irish parliament took several decisions concerning expenditure cuts. What are the most important results for the people of Ireland?
The deep economic crisis hitting the Irish economy is part of the global crisis of the capitalist system itself, with specific Irish features.
The 2011 budget is a continuation of the “austerity” budgets of the three previous years. This budget was constructed under the control and guidance of the European Union and in particular the European Central Bank. The EU-IMF strategy demanded a €6 billion adjustment over the next four years in a budget of €15 billion and in an economy already struggling to keep afloat, when €14½ billion had already been taken out of the economy in the three previous budgets.
The political and economic priority established over the last three years, and continuing into the future, is to make working people, the poor, those dependent on social welfare, small businesses, the self-employed and family farmers carry the burden of the financial crisis and the deep structural problem lying at the heart of the economy of this country.
While the European Union is driving the process and is now micro-managing the Irish economy, there is no strategy for job creation for the nearly 500,000 people unemployed, nor for the tens of thousands emigrating to look for work.
The present fiscal strategy is unsustainable, as are the private banking debts that the state socialised and transformed into sovereign debt, or what Irish communists call illegitimate debt.
More than €2.2 billion has been cut in current government spending: that is approximately 27 per cent of capital spending, concentrated in such areas as health, education, and social protection. The legal minimum wage was reduced by 11½ per cent (from €8.65 to €7.65 per hour) as a prelude to a sustained attack on registered employment agreements, which set minimum wages and standards for workers in a wide range of industries—including construction, hotel and catering trades, and the retail trade—many of them already low-paid workers.
The real detail of the budget will become apparent only when the Finance Bill is published in February, which gives legal effect to budget decisions. It is here that the real cuts will become apparent, rather than in the stage-managed set-pieces in Dáil Éireann (as in most bourgeois parliaments).
What does this mean for a normal workers’ family?
Three-quarters of the projected savings of €1.8 billion will come from the Department of Social Protection (€873 million), the Department of Health and Children (€746 million), and the Department of Education (€170 million), with the remainder coming from a combination of the other government departments. University and college fees have also been increased, adding further to the difficulties and the obstacles faced by young people from working families.
New taxation measures will increase the level of inequality. These include a reduction in social welfare payments by €8 per week and the proposed reduction in the minimum wage. Child benefit has been cut by €312 per year. The reduction in tax credits announced in the budget is regressive, because it reduces the income of all people earning more than €18,000 per year by 12 per cent and will therefore have a greater impact on lower and middle earners than on high-income groups.
The cuts in social welfare will mean that families that receive social benefits will have their benefit cut by between €619 and €1,115 per year. More than 14 per cent of the population of the Republic live below the poverty line, and more than 18 per cent of all children live in poverty. This figure is growing, as will the number of working poor, while those earning €75,000 or more per year will be better off by €1,185 per year.
Does the Irish government really expect this will help to get out of the crisis?
Before the budget the Government launched its National Recovery Plan, including what it calls a “four-year plan” that describes its priority areas. Like most things under monopoly capitalism, what is in the interests of the people comes far down the list of priorities. After its launch, both the European Union and international finance houses wanted all the political parties that are represented in Dáil Éireann to agree to the plan, thereby tying any likely future Government to the strategy now being imposed. The three largest parties—Fianna Fáil, Fine Gael, and the Labour Party—have more or less adopted the economic and social priorities being imposed by the European Union and the International Monetary Fund, although they go through the ritual dance of stepping in and stepping out of agreement.
Under the Government’s bank guarantee scheme the corporate debt of six Irish banks and financial institutions was socialised, which may well result in the Irish people being burdened with an unpayable debt of €240 billion or even ultimately in the region of €500 billion—on a population of 4½ million people. This strategy was dreamed up and imposed by the European Central Bank and the EU Commission.
At the very heart of this strategy is the object of sustaining the German banking and financial system, as well as the British and French banks. It has recently been revealed that the Republic’s banks were the fifth-largest lender to Portugal, Spain and Greece and the seventeenth lender in the world. The Irish “financial services” industry was being used as a conduit for speculative investment products by European finance houses, in particular German finance capital. It is estimated that Irish banks owe German banks an amount in the region of €130 billion—and the Irish people are now being forced to pay this.
This is all for the purpose of saving the euro, which Irish communists campaigned against the Irish state joining. We now publicly call for a break with the euro.
What will be the consequences for the development of the Irish national economy?
From a very early stage the economy of the whole of Ireland (the Republic and the Northern part of the country incorporated in the British state) was structured to meet the needs of the British empire. This dependence was one of the main reasons for the partition of the country in 1922, as the most developed part of the country was the North, while the South was a provider of cheap food and labour.
Since this state was established it has mainly pursued a policy of maintaining that dependence in one way or another. In the late 1950s and 60s the policy of encouraging transnational corporations to establish a base in the Republic became the priority. This created a new dependence relationship with the United States, subsequently added to when Ireland join the EEC. The Irish ruling clique have consistently tried to balance this trio of relationships—the United States, the European Union, and Britain—to meet their own class interests.
This deep structural weakness lies at the heart of our problems. Irish capital was unable, and in some instances unwilling, to invest in the long-term economic and social development of the country, resulting in the fact that we have a very speculative, parasitic ruling clique, wedded to the needs and interests of international capital.
The growing indebtedness of the state is leading to a “fire sale” of public assets to international asset-strippers seeking to make a quick buck. This asset-stripping is being actively encouraged by the EU-IMF deal. The Irish Government has to provide weekly and quarterly reports to both institutions, with targets being set for the Irish state to meet. Very strict and punitive sanctions have been agreed for the Irish state to be eligible to draw from so-called “solidarity” package.
What are the proposals for a solution of the problem from the point of view of the Irish Communists?
From the very beginning of the crisis Irish communists opposed the blanket state guarantee to the banking industry and campaigned to allow the private banking sector to live by the laws of the “market,” that is, to be allowed to fail. We called for the establishment of a State Development Bank, under democratic control and constitutionally guaranteed, to secure the people’s savings and pensions. As well as a new state bank we proposed the establishment of an all-Ireland Economic Development Corporation, to expand the state sector into new-technology areas, to manage and develop all natural resources, especially oil and gas (the Irish state estimates that deposits worth €500 billion lie off the west coast), as well as marine resources. We also called for the repatriation of the control of fisheries to the member-states.
The state bank and state development corporation could consolidate and concentrate capital and its use in a more socially and environmentally sustainable way. Also, because it would be national, it would provide an essential building-block in establishing an all-Ireland economy, which would bring about greater unity among the working class, north and south.
We define the present stage of the struggle as a national-democratic transformative strategy. This is a strategy that could transform the demand for change into a strategic necessity, opening up a path to deepening the struggle for national democracy and economic sovereignty and eventually to socialism and, we believe, transforming the demand for socialism into a reality.
The forces for change have been slowly gathering pace, with more than 100,000 working people taking part in a mass demonstration in late November. A conference in October gathered together more than a thousand activists under the slogan “Claiming our future.” Another major conference is planned for late January. After the budget, thousands of community activists took part in a street carnival under the banner “You cut, we bleed.”
The trade unions have been very weak in their response, as a result of decades of “social partnership,” or what we would call class collaboration. Though it was the trade union movement that called the major demonstration in November, a letter circulated by the leadership stated that they did it because they “needed to do something.”
Most recently, the Communist Party of Ireland held a public meeting on the theme “After the budget—What to do now?” Some leadership members of the trade union movement took part—a significant break in the anti-communist ideology that has infected much of the trade union movement over the decades. Irish communists are renewing their campaign under the slogan “Build the people’s resistance—Build the people’s alternative.”
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