Wednesday, April 25, 2012

V Day Film Show

V Day Film Show
Ordinary Fascism (1966)

Wednesday 9 May
Pearse Centre, 27 Pearse Street

May Day Film Show

Progressive Film Club - May Day Film Show

Saturday 28 April, Connolly Books

Details check out

May Day in Belfast

May Day in Dublin

Public Meeting: Class and Culture, Communist Party of Ireland, Connlly House, Saturday 28 April, 2pm

Artist Robert Ballagh, Prof. Helena Sheehan, Blogger Barry Healy, Dole TV's Turlough Kelly

PAME E Magazine

Check out the latest version of e magazine from PAME

Tuesday, April 17, 2012

Europe’s economic suicide

Europe’s economic suicide

Paul Krugmann - NY Times

On April 14 the Times reported on an apparently growing phenomenon in Europe: “suicide by economic crisis”, people taking their own lives in despair over unemployment and business failure.

It was a heartbreaking story.

But I’m sure I wasn’t the only reader, especially among economists, wondering if the larger story isn’t so much about individuals as about the apparent determination of European leaders to commit economic suicide for the continent as a whole. Just a few months ago I was feeling some hope about Europe.

You may recall that late last fall Europe appeared to be on the verge of financial meltdown; but the European Central Bank, Europe’s counterpart to the Fed, came to the continent’s rescue. It offered Europe’s banks open-ended credit lines as long as they put up the bonds of European governments as collateral; this directly supported the banks and indirectly supported the governments, and put an end to the panic.

The question then was whether this brave and effective action would be the start of a broader rethink, whether European leaders would use the breathing space the bank had created to reconsider the policies that brought matters to a head in the first place. But they didn’t. Instead, they doubled down on their failed policies and ideas.

Consider the state of affairs in Spain, which is now the epicentre of the crisis. Never mind talk of recession; Spain is in full-on depression, with the overall unemployment rate at 23.6 per cent, comparable to America at the depths of the Great Depression, and the youth unemployment rate over 50 per cent. This can’t go on — and the realisation that it can’t go on is what is sending Spanish borrowing costs ever higher.

In a way, it doesn’t really matter how Spain got to this point — but for what it’s worth, the Spanish story bears no resemblance to the morality tales so popular among European officials, especially in Germany. Spain wasn’t fiscally profligate — on the eve of the crisis it had low debt and a budget surplus. Unfortunately, it also had an enormous housing bubble, a bubble made possible in large part by huge loans from German banks to their Spanish counterparts. When the bubble burst, the Spanish economy was left high and dry; Spain’s fiscal problems are a consequence of its depression, not its cause.

Nonetheless, the prescription coming from Berlin and Frankfurt is, you guessed it, even more fiscal austerity. This is, not to mince words, just insane. Europe has had several years of experience with harsh austerity programmes, and the results are exactly what students of history told you would happen: such programmes push depressed economies even deeper into depression. And because investors look at the state of a nation’s economy when assessing its ability to repay debt, austerity programmes haven’t even worked as a way to reduce borrowing costs.

What is the alternative?

Well, in the 1930s — an era that modern Europe is starting to replicate in ever more faithful detail — the essential condition for recovery was exit from the gold standard. The equivalent move now would be exit from the euro, and restoration of national currencies. You may say that this is inconceivable, and it would indeed be a hugely disruptive event both economically and politically.

But continuing on the present course, imposing ever-harsher austerity on countries that are already suffering Depression-era unemployment, is what’s truly inconceivable.

So if European leaders really wanted to save the euro they would be looking for an alternative course. And the shape of such an alternative is actually fairly clear.

The continent needs more expansionary monetary policies, in the form of a willingness — an announced willingness — on the part of the European Central Bank to accept somewhat higher inflation; it needs more expansionary fiscal policies, in the form of budgets in Germany that offset austerity in Spain and other troubled nations around the continent’s periphery, rather than reinforcing it. Even with such policies, the peripheral nations would face years of hard times. But at least there would be some hope of recovery.

What we’re actually seeing, however, is complete inflexibility. In March, European leaders signed a fiscal pact that in effect locks in fiscal austerity as the response to any and all problems. Meanwhile, key officials at the central bank are making a point of emphasising the bank’s willingness to raise rates at the slightest hint of higher inflation.

So it’s hard to avoid a sense of despair. Rather than admit that they’ve been wrong, European leaders seem determined to drive their economy — and their society — off a cliff. And the whole world will pay the price.

More Europe a threat to democracy


by Rui Paz, PCP

An expressive part of the federalist elites which currently are obliged to isolate themselves from the euphoria of how they greeted the Euro, the Lisbon Treaty and other stages / periods of the EuropeanUnion (EU) integration process, carries on defending that the solution for the current political, economic and social crisis passes by “more Europe!”.

They criticize and with reason, Germany’s Chancellor, adictator as for her threats and acts against the peoples’ sovereignty,but repeat the words of order which lead exactly unto what the German great capital aims at, its interference power reinforcement within the political guidance of the other states’ governments.

“More Europe!” in reality, signifies the deepening of federalism, more German hegemony,more social setback and attacks to democracy, more militarism. In reality, the EU, as gradually proceeds its deepening, becomes, moreand more, a real threat against most of the member-states’ sovereigntyand a deadly danger concerning the democratic and social achievements conquered through the workers’ and peoples’ struggle, after the Nazi-Fascism defeat.

The brutal offensive throughout the social level is accompanied by an close attack against peoples’ sovereignty and the principles of democracy. Federalism supporters try to conceal that, without the respect for each State’s sovereignty and the will of decision of each people, democracy is not possible / is inexistent.

It is convenient not to forget that the whole EU integration processh as run from democracy as the devil from the cross. How many important/major decisions were taken /approved within the silence of offices,forbidding referendums and popular inquiries? How many electoralprocesses in which the electors voted against the EU’s biddings wererepeated unto the outcome was according to the aimed objectives?

In the moment the “home troika” gathers in Parliament, in order toratify the so-called “budget treaty”, it is imperative to recall themain objective of the federal leap in process, which is not but thedeficit reduction but, with the pretext of the debt decrease, obligethe overwhelming majority of the people to pay the crisis effects,therefore obtaining a fundamental change in the distribution of theproduced wealth in favour of the great capital.

According to the imperialist logic, the labour-force price ought to fall / decrease unto an unsupportable level for the workers, within all the EU states.It is a same mentality of a concentration camp and slavery, which isto be legalized /validated along with the slogan of “more Europe”.

The more the EU integration process advances, the more the sufferingpeoples understand Europe’s capitalist integration process subversiveand antidemocratic character and the existence of an illegitimatepower which is determined to nurture /foster a permanent / constantcoup situation against the very own parliamentary principles.

Currently, it is easy to verify how the PCP, through Alvaro Cunhal ‘svoice, the late Secretary-General, was totally right, when he warned:“ With federative structures and a really indeed central government,together with common policies imposed by the more developed andpowerful countries, with the less developed countries change untoperiphery countries with no policy of their own, with the passive andsubmitted acceptance towards an autonomous NATO, commanded by theUnited States and dragging along the peoples unto criminal wars - this new Europe smother’s / strangles/ silences and liquidates the lessdeveloped countries’ sovereignty, does not serve the peoples andnations interests, nor the Portuguese people and nation interests” (in the Truth and the Lie within the April Revolution, 1999,p.321).

As in other moments of History, the peoples will ought to defend andrestore, through their struggle, their rights and achievements and aswell as Democracy itself.

Thursday, April 12, 2012

Stop Listening to the Banks

The financial and economic crises have revealed the entrenched power of the banks in the European Union. In this EU in Crisis essay, Corporate Europe Observatory’s Kenneth Haar describes how a wave of financial regulation was set in motion by the crisis in 2008. By now most of this regulation has been passed, and there’s plenty of evidence to show that the banks are being let off the hook. Looking back, banking lobbyists can conclude that decision makers have practically fallen over themselves to serve the banking industry’s interests. The dream of a European Union that would curb the power of finance has become a joke, and instead we’ve seen a bankers’ Europe emerge that may make even Wall Street envious.

The problem is systemic. Banks have been allowed to grow so big that the collapse of just one poses a major problem to society. They’ve also been allowed to make huge risky bets, often using ordinary people’s money. There are remedies to this, reforms that could roll back their power. But the first necessary step might be simply to make politicians and Commissioners stop thinking of bankers as the oracles of the economy.

A captive Commission

Less than 15 years ago, banking was not really the EU’s business. Regulation was either framed internationally at the Basel negotiations or at the national level. But by the end of the nineties, there was an emerging consensus among governments on building a genuine single market for financial services. The aim was to remove barriers for banks and other financial institutions, not to strengthen regulation which might avoid systemic risks or reign in speculators. They did not want to contain the financialisation of the economy, but promote it. This model was developed in close cooperation with those who were considered the real experts, the big financial institutions themselves, not least the banks.

At the time, banking was not a seriously politicized issue, so only a few fought to denounce the problematic influence of banks on EU legislation. Whenever new initiatives were being developed, or old ones reviewed, the Commission routinely called in the big players to get their opinion. The Commission would then write proposals in line with their advice, and these would generally be adopted with only minor changes.

The financial crisis set new agenda

But with the financial crisis in 2008, the party seemed to be over. There was brutal criticism of irresponsible banks and of the lax rules on banking from all sides. Governments and EU Commissioners alike came out with remarkably aggressive statements on the irresponsibility of banks and on the need to review legislation.

“I think the current crisis has shown that we need a comprehensive rethinking of our regulatory and supervision rules for financial markets” said the President of the Commission José Manuel Barroso.

His colleague in the Commission, the top man of Single Market regulation Charlie McCreevy, flatly admitted to listening too much to financial corporations:

“What we do not need is to become captive of those with the biggest lobby budgets or the most persuasive lobbyists: We need to remember that it was many of those same lobbyists who in the past managed to convince legislators to insert clauses and provisions that contributed so much to the lax standards and mass excesses that have created the systemic risks. The taxpayer is now forced to pick up the bill.”

Quite amazing words from the very man who had let the financial lobby dominate his own work with financial regulation. There seemed to be little doubt that radical reforms were in the pipeline.

Costly safety nets

The crisis revealed both extreme excesses by the banks and a flawed system of supervision and regulation. It left their public reputation in tatters. But new effective regulation was not the first priority. Top of the list was saving the banks.

One spectacular rescue operation after another has weighed heavily on member states’ budgets. As when the Irish government assumed the debts of Anglo Irish Bank, allegedly pushed by Goldman Sachs International chairman, former EU Commissioner and former Irish Minister Peter Sutherland. A move that could ultimately have left the Irish tax payers with a 47 billion euro bill – more than a third of the country’s GDP.

Or when the Franco-Belgian bank Dexia collapsed twice, first in 2008, when it was only saved by a loan guarantee of 150 billion euro. Then again in October 2011, when the Belgian government guaranteed a loan of 54 billion euro, (14 per cent of the country’s GDP) plus an immediate pay-out of 4 billion euro for the take-over of Dexia-Belgium. With Belgian MEP and former minister Jean Luc Dehaene on the board, Dexia had easy access to the political elite of the country.

Enormous amounts of public money have been put at risk to save the banks. Combined, the 27 member states of the EU have (by October 2011) set aside 4.5 trillion euro for support, guarantees and loan packages to banks, or almost double the annual GDP of Germany.

The generous side of the ECB

The euro crisis has revealed the potential to raise huge sums of money when the health of the balance sheets of banks is at stake. In fact, the European Union is putting the banks at the forefront of its attempt to stave off the crisis and kickstart the economy. In December 2011, the new President of the European Central Bank, former Goldman Sachs director Mario Draghi, launched a bold initiativeto ignite bank lending to the private sector and calm the rise or even reduce the interest rate on sovereign bonds. The ECB spent 489 billion euro in this first batch of the Long Term Refinancing Operation (LTRO) – cheap loans and no strings attached - a move widely welcomed by the banks.

“Seeing this amount of liquidity from the ECB is encouraging. To whatever degree investors are nervous about stepping back into markets and funding banks, the ECB will be there and provide liquidity to make sure things keep ticking over,”

a strategist at the US investment bank JP Morgan said in December 2011.

The bargain loan sale was to continue, and in February 2012 another 530 billion was put up for grabs, this time to the benefit of certain consumer loans – and bringing the total to 1 trillion euro. Car manufacturers Mercedes Benz, Daimler and Volkswagen were among the beneficiaries, thanks to their financial arms set up to provide customers with loans to buy a car. But there is little real evidence to prove the LTRO has met its objectives. While President Draghi claimed the initiative to be ”an unquestionable success”, his own ECB reported in February that loans to the real economy actually fell in February.


The jury may still be out on the final verdict, but either way the LTRO begs a couple of questions. If the ECB can provide so much money, why spend it boosting the banks’ coffers in the hope that the banks will lend more cheaply to governments? Why not lend directly to governments? And if the real economy needs a boost, why not support public investments, for instance by investing in green energy greening the economy? The answer is that according to EU treaty, the ECB has to be independent of governments and is barred by law to provide direct loans. As a result the ECB backs the banks as the life and blood of the economy.

And there’s another absurdity at play: the money spent on the LTRO is double the amount of money put into the new rescue fund over the next three years, the European Stability Mechanism (ESM), to offer loans to the governments of states in severe crisis. While the LTRO attracted little political controversy, finding half the amount of money for government lending has been very difficult and has taken several EU summits to get settled.

Even so, it’s likely we will see an LTRO 2 in the not so distant future. because a lot of banks are ”chronically dependent” on the funds from the ECB according to Alberto Gallo, a strategist of Royal Bank of Scotland.

Shaving Greece

The economic generosity to banks is mirrored by political generosity, and one incident is a stark symbol of this.

Shortly before the start of a Eurozone summit in July 2011, a black car pulled up in front of the Council building in Brussels, and out stepped a man in a suit, shaking hands and smiling – like any leader of state or government. Despite appearances, he was not a statesman, but Joseph Ackermann, the chief executive of Deutsche Bank and chair of the international banking lobby group, the Insitute of International Finance (IIF), joining the negotiations with governments on the Greek debt.

Before these talks, it looked as if banks would have to pay part of the bill for their investment adventures. During 2011 it had become clear that it was impossible for Greece to service the burden of debt accumulated, which included loans to private banks. A so-called ‘hair cut’ to trim the debt was needed. A solution had to be found with the banks – and so Ackermann was invited to join the summit.

It could be argued that the banks brought this on themselves, and that when their investments turned sour, they should simply have been left to bear the losses. But when years of easy prosperity ended, it was seen as a problem governments would have to solve. The big banks were seen as counterparties with whom Eurozone governments would have to negotiate. Following the negotiations led by Ackermann, a deal was finally reached with officials of the Greek and Euro Area, and ‘eventually with the Euro Area states or governments and EU institutions’, as an IIF document set out.

Evidence suggests Ackermann is a skilled negotiator. On the face of it, the banks had to swallow a 50 per cent cut, but the value of Greek bonds had plummeted to 35 per cent of their nominal value. With the deal, governments had in fact come to the aid of banks. Less a ‘hair cut’ for banks, more a full-body shave for Greece.

And there was an extra bonus for the banks, with a clause in the treaty underpinning loans to crisis ridden Eurozone economies – the ESM Treaty - that will prohibit governments from future attempts to make the banks write off debt owed to them by governments.

The usual suspects

Against this background, it would be a surprise if the European Union had in fact enforced strong regulation – disobeying advice from bankers to refrain from real action

.Indeed, the first thing, the Commission and the Council did in 2008 was to set up a high-level advisory group to propose an overall approach to financial reform. Of the seven in the group, 4 had strong ties with big banks, a fifth was the regulator blamed for ineffective supervision of British banks, a sixth was known for extreme liberalist views. In other words, the EU had asked the very kind of people who were responsible for the crisis, how to respond to it. Their report would be seen as a benchmark in the future proposals.

Despite the impatient rhetoric at the start of the crisis, the pace of reform was soon to slow. And the banking lobby did its best to stave off ambitious measures. To do this, they used scaremongering, and the IIF were masters of the craft. Ackermann stated that there was a “very real risk” that “regulatory reforms come into force that could undermine global recovery and job creation”. And the IIF carefully timed the release of a report on the dangers of regulation for the summer of 2010. That’s when the international negotiations on banking regulation (the Basel Accords) reached a climax. By then the political mood had changed completely. The desire for reform had been dampened by fear of slower growth and instability in the banking sector. That allowed financial lobbyists to temper politicians’ ambitions.

Little hope for credible steps

According to a new part of the the Basel III agreement, if Lehman Brothers had been scrutinised shortly before its collapse, it would have been considered a sound enterprise! At that time, Lehman Brothers’ leverage (how much money banks lend compared to the value of their assets) was 31 to 1. Under the agreement the limit is at 33 to 1. In other words: according to this set of rules, Lehman Brothers was a sound company when it went bankrupt.

The new Basel Accord (dubbed Basel III) is not legislation in itself, but rather a set of guidelines. Theoretically the rules it sets out can be improved when implemented nationally or in the EU. But there is no sign of a stronger approach in the EU. For instance, the advisors at the Commission are no different from those nurtured by Commissioner McCreevy before he left in early 2010. In one phase of the discussion, the key advisory group to advice the Commission on banking regulation, the Group of Experts on Banking, was heavily dominated by "experts" from banks affiliated to the IIF lobbying group, which worked so hard to water down any international regulations. Of the 42, 23 were members of the IIF, and most of the rest were from other financial corporations.

And the governments? The German and French governments recently came out against Basel III, claiming it would have a ‘negative effect’ on growth and would have to be watered down when implemented in legislation.

Stop listening to banks

The privileged role of banks in the debate on banking regulation reform is no real surprise. That the financial corporations have been given a prominent role has been true of all the reforms of the financial markets since the EU’s first comprehensive strategy on financial markets in 1999. Some small things have changed since the crisis of 2008, but the changes to legislation on derivatives, on accounting, on tax havens, and on hedge funds, have failed to meet the challenge posed so dramatically by the crisis. And when the Commission takes the unprecedented step of proposing a tax on financial transactions (FTT), the eventual details reveal it is a long way from the original design. And there is little hope of even this watered down version becoming a reality, due to opposition from some member states.

What this comes down to is the dominance of the financial sector in the debate on financial regulation, and banking regulation is no exception to the rule. In a comment on banks’ influence on the handling of Greek debt, two financial experts, Simon Johnson and Darem Acemoglu, recently wrote: “The lesson for Europe – and for the US – is clear: it is time to stop listening to what banks say, and start focusing on what they do. We must re-evaluate the distorted political economy of the financial sector, before the excessive power of the few imposes even larger costs on everyone else.”

It ought to be shocking to see the dependence of decision makers in the Commission and in member states on banks and bankers. When they want advice on banking regulation, they ask bankers. When the banks are in trouble, they socialise their debt. When the economy is in trouble, they hand out money to banks. The bankers are grateful, but society at large shouldn’t be.

Breaking the strong links between banks and the political system seems to be a prerequisite for the deeper reforms needed. As long as the words of bankers and the narrow interests of banks carry more weight than the words of those who pick up the bill, we’re in deep trouble.

Wednesday, April 4, 2012

Support imprisoned Catalan communists

Solidarity with the imprisoned Catalan Students arrested during the General Strike

On Thursday 29th March, during the activities organized by the pickets of the general strike in the University area of Barcelona, the Catalan police arrested two students, Isma and Dani,members of our member organisation CJC-Joventut Comunista de Catalunya and the AEPAssociaciód’Estudiants Progressistes respectively.

In total, that morning were arrested and taken to the police station in Les Corts, over thirty people.A large group of family and friends moved to the City of Justice and waited for their departure,to welcome them and show their support, because everything pointed that after testifying, allthe detainees would be released.

Unfortunately, at 10pm, the lawyers reported that the Ministerio Fiscal in Madrid askedpreventive imprisonment for all detainees, and at 22pm they finally confirmed that Isma, andDani would be transferred to different prisons under provisional imprisonment and withoutbail.

They are accused of public disorder, damage to public property and injury to law enforcement,among others, and the reasons given to justify their provisional imprisonment are theensurance of their availability to the court and the alleged danger of recidivism.

The World Federation of Democratic Youth states:

That Isma and Dani are young people organized in legitimate and necessary associationsand involved in their respective communities where they struggle for the common good.

That in a democratic system, the presumption of innocence must be respected.

That the decision to imprison them is misplaced and exaggerated as there is no risk of escapeand they have no criminal records.

For these reasons, we support the petition of review of the case that was presented in their Defense on Monday 2nd April, we demand the immediate release of the detainees and we askthe youth of the world to express their solidarity with the Catalan Students.

Budapest April 4, 2012
The CC/HQ of WFDY.

Austerity's Wake: Why Ireland's Spending Cuts Should Scare Us Too

Matthew O'Brien is an associate editor at The Atlantic covering business and economics. He has previously written for The New Republic.

Austerity's Wake: Why Ireland's Spending Cuts Should Scare Us Too
Mar 28 2012
If you want to know what real austerity does to a country, check out the Emerald Isle. The below chart from the Irish Central Statistics Office shows the percent-change of Irish household disposable income from 2009 to 2010, broken down by income decile.
(Note: The tenth decile refers to the most affluent ten percent of households, the ninth decile to the next most affluent ten percent, and so on, and so on).
This is what austerity looks like when the brunt of retrenchment comes from spending cuts rather than revenue increases. People who rely on the government the most suffer the most. People who rely on it less suffer less. And people who don't really rely on it at all don't really suffer at all. As a result, the poor get whacked, the middle class gets punched, and the rich get richer.
When Republicans and Democrats fight over deficit reduction, they're fighting over who gets hurt. Will it be the poor with safety net cuts, the middle class with tax and entitlement tweaks, or the rich with upper-end tax hikes?
If Ireland is any guide, a cuts-only approach like Paul Ryan's "Path to Prosperity" will have a very predicable short-term effect on family incomes. By cutting taxes for the rich, the rich will benefit. Meanwhile, the other 99% who depend on road, public schools, and FDA-inspected food, and even unemployment insurance will be out of luck. There won't be much money left for any of those things. That is the inevitable conclusion of shrinking discretionary spending to century-lows.
Ryan and conservatives are within their right to call for dramatically shrinking government. But Ryan's future is a different country. And it just might look like Ireland.