Demonstration in Dublin, Ireland

Huge demonstration against the new regime

Over 50,000 demonstrate!!

In Dublin on Saturday 27 November more than fifty thousand workers and their families took part in a massive show of opposition to the takeover of the Government by the European Union and the International Monetary Fund. Trade unionists, pensioners’ organisations and community organisations took part in the demonstration, which was organised by the Irish Congress of Trade Unions.

CPI Statement - 29th November 2010

IMF, ECB and EU sacrificing Irish people to save the euro

The imposed “solution” to the Irish state’s growing and deepening crisis is to make every person an indentured servant to the needs and interests of EU finance houses, in particular to German banks. The National Pension Fund is now to be squandered to bail out banks that should have been allowed to go to the wall from the beginning.

The punitive interest rate of 5.8 per cent is unpayable without enormous hardship being inflicted on the people. There is no other solution than to repudiate this unpayable debt.

It is clear that the Irish establishment put up little if any resistance to the demands being imposed by our so-called “partners” in the European Union. These are the same people who negotiated the Lisbon Treaty while admitting that they had not even read it.

The dependent relationship with the EU that all three main parties have pushed our country into over the last four decades is now being laid bare. They have now put the interests of saving the euro and German bond-holders before those of the Irish people.

Working people will pay a very heavy price over the coming decades for the deal being imposed by the EU and ECB and the IMF. Thousands of jobs will be lost, hospitals will close, class sizes will grow even worse. Those who still harbour the illusion that the European Union is somehow good for working people, either here in Ireland or in the members-states in general, need to think again.

It is the first duty of the state to protect all its citizens. We need to break whatever EU rules and treaties are necessary in order to protect the interests of the Irish people, and to set about a fundamental change in economic policy and direction. Statement ends

CPI Makes Demands!

STATEMENT ON THE CURRENT ECONOMIC SITUATION AND THE ROLE OF THE IMF

Chickens coming home to roost

The Communist Party of Ireland calls upon working people, and in the first place the organisation that claims to represent them, the trade union movement, to resist the policies that both the European Union and the International Monetary Fund are imposing and will impose in the coming period.

It would be laughable if it was not so serious for working people of this country to hear the three main establishment parties outdoing each other in their pretence of defending our national sovereignty. All of them, together with the mass media, railed against those who raised the question of the loss of sovereignty that would result if we passed the Lisbon Treaty, as well as previous EU Treaties. Did we not constantly hear the common refrain, that sovereignty was an “outmoded concept”?

The Irish people will have to shoulder a further burden of corporate debt piled upon corporate debt. The sovereign debt now being placed on the backs of the people is unsustainable and unpayable. This is a massive transfer of wealth from working people to global finance corporations through a revolving door whereby money is borrowed from institutions and is then being given back to them.

The IMF “medicine,” like that now being imposed by the European Union, will only lead to the devastation of public services. Older people will die on trolleys waiting for a bed, more children will have to forgo operations and other treatment, and many more will go to bed hungry. Schools and hospitals will close; thousands of pensioners will be driven deeper into poverty.

Their “medicine” is for making the poor, the sick, our children, working people, small businesses, the self-employed, family farmers and those receiving social welfare benefits pay for the crisis of the system itself.

This debt belongs to the speculators, the finance houses, the German and French banks. It is not the people’s debt; it is not the people’s responsibility.

The deep structural weakness, north and south, can be overcome only by taking a strategic all-Ireland approach to economic and social development, a strategy that is politically, economically and socially transformative. Only the development of a socially planned use of capital and resources can overcome the anarchy and chaos of capitalism.

Central to any such alternative must be:

• repudiating the debt; it is their debt, not ours;

• the return of fiscal powers from Brussels to the Irish people;

• the establishment of a state investment bank;

• the establishment of an all-Ireland economic development agency under democratic control;

• the social control of all natural and marine resources, to be developed in a sustainable manner by the people.

Taking advantage of the crisis

Political Statement of the CPI

The deepening crisis of the monopoly capitalist system—imperialism—has exposed the deep structural crisis lying at its very heart. The crisis has also shown that the system is incapable of resolving its deep contradictions without resorting to a massive assault on the working conditions and living standards of working people and on the gains made by working people over decades of mass class struggle.

The system itself is incapable of resolving and finding solutions to the many and growing problems facing humanity, including mass poverty, starvation, and food shortages, and the urgent need to counter global warming.

The policy being pursued is to inflict mass unemployment, greater inequality, greater concentration of wealth, more monopolisation, greater exploitation of workers and the poor, the destruction of communities, increased militarisation, and wars.

The Irish people, both north and south, are now being forced to pay a heavy price for the failed policies of both the Irish and the British government. These attacks are on a qualitatively new level, building in to budget policies a deliberate reduction in public spending, structured attacks on public services, attacks on social welfare, increases in both direct and indirect taxes on working people and the poor, and the socialisation of corporate debt while leaving wealth untouched.

The imposition by international finance capital and the European Union of a four-year budgetary strategy is designed to circumvent and undermine the democratic will of the people. Their approach is to build structural readjustment programmes in to all economic and social policies that any possible future Irish Government may wish to implement.

The crisis has also exposed the damage done, both north and south, to economic and social development by over-reliance on finance, insurance, real estate, and transnational capitalism.

The European Union is taking full advantage of the crisis to push its strategic approach of establishing greater control over the national budgetary strategies and the social and economic priorities of member-states. Throughout Europe, workers, small businesses, the self-employed, family farmers and those dependent on social welfare are being forced to pay a heavy price for this crisis. In the peripheral countries within the European Union these social strata are being asked to carry an even greater burden to save German, French and British finance capital—in fact to save the euro itself.

Resistance to these policies is growing throughout Europe. In Ireland, as elsewhere, the labour movement is central to this opposition. The promotion of a clear alternative within and by the trade union movement, based on the interests of the mass of the people, not the employers and the banks, is essential. This means the rejection at every level of the labour movement of the flawed and now clearly failed strategy of “social partnership.” The employers are already making it clear that they have no intention of protecting jobs or restraining wage cuts. It is also clear that the trade union movement and public-sector workers were sold a pup in the Croke Park agreement.

The Government and employers no longer require “social partnership” to secure their strategic interests. The trade union leadership must make it equally clear that they too have no lingering illusions about it.

What is required now is a vigorous, sustained campaign to oppose not just the forthcoming budget but the whole Government economic strategy, which is broadly supported by the main opposition parties, and total opposition to the further privatisation of public services and the selling off of public companies.

The trade union movement in Northern Ireland showed in the recent mobilisation of thousands of working people that people will resist when clear leadership and demands are presented. This is the lesson that the labour movement throughout Ireland has to build upon. The Communist Party of Ireland calls upon workers, small businesses, the self-employed and the unemployed to support the mobilisation on 27 November being organised by the ICTU.

It is not too late to assert the absolute necessity for the independent mobilisation of workers. Workers need to present their own view of the economic and social development needed. A necessary first step is to reject the manufacturing of ideological consent, that we must all “share the pain.” As the crisis has presented state monopoly capitalism with the opportunity to launch deeper and more sustained attacks on workers, the labour movement must respond with its own demands and alternative economic strategy.

The deep structural weakness, north and south, can be overcome only by taking a strategic all-Ireland approach to economic and social development, a strategy that is politically, economically and socially transformative. Only the development of a socially planned use of capital and resources can overcome the anarchy and chaos of capitalism.

Central to any such alternative must be:

• repudiating the debt; it is their debt, not ours;
• the return of fiscal powers from Brussels to the Irish people;
• the devolution of full economic and fiscal powers to the Northern Ireland Executive;
• the establishment of a state investment bank;
• the establishment of an all-Ireland economic development agency under democratic control;
• the social control of all natural and marine resources, to be developed in a sustainable manner by the people.

Irish Bailout Is a Backdoor Bailout of European Banking System

This is an article that was blogged by Larry Doyle a Wall Street veteran.

What is going on in Ireland? Those forty shades of green look so inviting. How could it be that the Emerald Isle is the center of the current financial turmoil? Well it is…and it isn’t.

How is it that a variety of Irish officials can claim that they neither need nor want a bailout from the EU but a bailout is assuredly on the way? Are we witnessing a sovereign nation losing the ability to control its own affairs? There is no doubt the Irish are a proud people but are they also being overly stubborn at this juncture (believe me, I know proud and stubborn…!!)? Are the Irish failing to accept the inevitable? Hadn’t the Irish attempted a Swedish style approach in terms of aggressively recognizing losses within their financial sector?

While the answer to all of these questions is a varying degree of the affirmative (especially the proud and stubborn..!!), to truly understand what is happening in Ireland, we actually need to shift our focus to the European mainland. Really? Why’s that? Let’s navigate the tangled web and interconnectedness of the global banking system circa 2010.

The ‘bailout’ structured as a loan that the European Union is close to forcing the Irish government to swallow has as much to do with banking on the continent as it does with the banks in Ireland. While I have yet to see any major media outlets fully explore and expose this reality, on October 19th The Economist Intelligence Unit did just that in writing, France/Europe Economy: Feeling Exposed?:

Two recent reports have highlighted the extent of French banks’ exposure to the sovereign debt of risky peripheral euro area countries, which is far larger than implied by the European stress tests conducted earlier this year. French banks are the most heavily invested in Greek sovereign debt, and also have considerable holdings of Irish, Portuguese and Spanish public- and private-sector debt. Regional bailout facilities in place to support struggling euro area countries have reduced the risk of another near-term financial shock, but the interconnectedness of the larger European banks and their exposure to the weaker member states suggest that liquidity, and possibly solvency, concerns could emerge should the sovereign debt crisis take a sudden turn for the worse.

Lot of good those European bank stress tests did us, heh? Yes, those were a joke. In regard to a sovereign debt crisis, well it took not even a month from the time of The Economist’s report for that ‘turn for the worse’ to be upon us. Let’s navigate further into this web.

Market participants will be aware, however, that the unfolding sovereign debt crisis across the euro area still has a long way to run.
You think? Understatement of the year!!

Despite substantial official bailouts (and the prospect of additional support in the future), sovereign borrowing in peripheral euro area countries remains under enormous strain, as international investors balk at a combination of unsustainably large fiscal deficits, highly indebted private sectors, significant crossborder banking exposures, and structural competitiveness issues that will weigh on economic activity for years to come.

This statement is also known as ‘the new normal.’ If the author inserted California for ‘peripheral euro area countries,’ the author may have just defined the economic reality here in the United States as well.

This, in turn, explains investors’ continued focus on the perceived health of the euro area banking sector, which remains under close scrutiny despite most of the region’s financial institutions receiving an apparent clean bill of health in Europe-wide bank stress tests conducted by the Committee of European Banking Supervisors (CEBS) in July. Since then, the rigour of the stress tests has been called into question on a number of occasions, most recently by an Irish MEP (member of the Europe Parliament), Alan Kelly, who has requested an explanation from officials as to how Allied Irish Bank was deemed to be sufficiently robust to pass the tests only a few months before Irish taxpayers were forced to step in with a €3bn capital injection.

My, oh my! Once again, investors get fed a healthy dose of ‘garbage in, garbage out’ in terms of the rigor of bank stress tests. (I highlighted as much in a Bloomberg Businessweek debate this past June 17th, Sense on Cents Enters The Debate Room).
A closer examination of institutions’ balance sheets would suggest that the underlying fragility of the European banking sector continues to harbour a number of risks to the cohesion of the euro area. One such risk reflects the significant share of sovereign debt of peripheral “deficit” countries that is held by banks in the “core” countries, primarily France and Germany. Indeed, the need to limit damage to the France-German banking sectors was one of the driving factors in establishing the EFSF (European Financial Stability Fund).

BINGO!!! There is your answer as to why the French and Germans are force feeding this loan down the Irish throat.

Given the regional rescue facilities now in place, another major financial shock appears unlikely in the near term.

The Economist Intelligence Unit report is fabulous, but they missed this call.
….given the substantial exposure of core EU countries’ banks to the struggling euro area periphery, the complex web of crossborder linkages, and the uncertain outlook for many developed economies as fiscal austerity starts to bite, policymakers would be wise not to downplay the risks to the region’s banking sector should the sovereign debt crisis take a sudden turn for the worse.

Like now. But what happens when the dominoes wobbling in the other PIIGS (Portugal, Italy, Greece, Spain) start to topple even further?