22.09.2010

Lurching into further crisis

Ireland could be another Greece before the end of the year, writes Anne Mc Shane

Enormous instability remains the key feature of the political and economic situation in Ireland. The crackdown on public spending is far from over as the government continues to borrow billions from international lenders. A draconian budget is planned for December to compel the working class to pay off the enormous interest on national debt.

Political stability is key to carrying out the new tranche of cuts - which is why the recent shambolic performance of the Taoiseach Brian Cowen has caused such panic in government ranks. It has also stirred up deep anger and dissatisfaction among the population. Cowen took part in an early morning radio interview during the annual Fianna Fail ‘think in’ on September 14 - an event designed to boost morale before the Dail resumes. Barely able to string a sentence together, it soon became apparent to stunned listeners that the Taoiseach was actually drunk. The day before had concluded with a six course meal for party members and journalists where the wine flowed freely. Cowen is known for his fondness for a drop and had obviously overdone it. That he (and his minders) actually agreed to take part in the radio show is astounding. He slurred his way through the interview, appearing not to know what was going on and at one stage confused the Croke Park deal (the latest social partnership settlement) with the Good Friday Agreement. The nation listened as he bombastically and drunkenly dismissed questioning on the disastrous state of the economy - his government had it all in hand, argued a stupefied Cowen. Very reassuring ...

Almost immediately the interview was transmitted around the world, causing hilarity and a great deal of embarrassment to the Fianna Fail/Green coalition. An RTE radio poll conducted later that day in Dublin revealed the depth of antagonism towards Cowen. It was not particularly his ineptitude that infuriated people but his sheer arrogance. It did not help that his conference speech had been a doom-laden homily preparing the population for the immense hardship to come. Even more bitter medicine would be administered to a working class struggling to cope with the enveloping crisis. Cuts in excess of the previously predicted €3 billion are on their way in the forthcoming budget. According to Cowen the only way to guarantee more credit from international lenders is to keep pace with the rising interest rates on the existing debt. That means even more savage attacks on public spending and increased tax on low earners. Everybody had to prepare themselves for the worst.

Having delivered his sermon, he then retired to an extravagant evening of food and drink. Party members wanted to celebrate the fact that they had managed not only to hang on to power but, more importantly, to push through national acceptance of austerity measures. It had been a tough year for Fianna Fail but they had succeeded in defeating the opposition from public sector workers. The Croke Park deal meant that in exchange for a continuing place at the negotiating table, union leaders sold out on the militancy of their members. The solid one day strikes of 2009 and the militancy of government workers had been overcome and now public sector unions had signed up to social peace for at least four years. There would be no more threats of strikes from the most organised and potentially powerful section of the working class.

Cowen looked at one stage as though he would be forced to resign. But a week later the threat has receded as he and his likely successor Brian Lenihan appeared for a photo shoot on Monday amid claims that Cowen has the full support of his cabinet. There is of course the problem of a willing replacement as the December budget looms - something of a poisoned chalice. Independent TDs on whom the government depends have also refused to countenance a third Taoiseach in a single Dail term. It is probably better to let Cowen take the flak now and go into the general election next year under new leadership. But Fianna Fail stands at an historic low in public opinion and with new polls in the offing the situation remains extremely uncertain for the government.

The problem is, of course, that the politics of the opposition parties is hardly any different. All, including the Labour Party, accept the need for ‘pain’. Labour leader Eamonn Gilmore came out against striking public sector workers last year with a call for unity in the national interest.

Senior EU officials are said to be very worried about an ‘extremely challenging situation in Ireland’. The level of government debt is unsustainable. €1.5 billion in bonds were auctioned off on September 21 with interest rates of over 6% on eight year bonds - a record level. Intent on borrowing its way out of the crisis, another government auction is due before the end of the year. Gross national debt is set to rise to 98% of GDP by 2012 even according to conservative government estimates.

One of the main difficulties has been the controversial and unpopular nationalisation of Anglo Irish Bank at a cost of almost €23 billion to the tax-payer so far - and a potential cost of €39 billion. As new revelations of corruption in the nationalised bank emerge, the crisis is bound to worsen. The high rate of interest on government bonds of course reflects uncertainty as fears intensify of the likelihood of an IMF intervention. Ireland could be another Greece before the end of the year, in spite of all efforts to satisfy international markets.

I have described in previous articles what all this has meant for the working class. Unemployment continues to climb and official figures now stand at half a million - in a population of 4.5 million. This does not include the many thousands of self employed individual building contractors - the main source of work for young men during the Celtic Tiger years. Neither they nor their dependents are entitled to any social welfare payments. This means in effect a significant section of the working class who receive no income at all and are shackled by debt to mortgage companies, banks and other lenders. Prison for those who cannot pay is an increasingly common phenomenon.

Job insecurity has given employers the upper hand with employees willing to accept wage cuts rather than lose their job. With the working class angry but demoralised the bourgeoisie have been taking advantage. Labour legislation is being ignored as workers are either sacked or laid off with no redundancy payments. With a massive backlog of unfair dismissal claims, it is taking up to two years for cases to reach tribunal stage, in which time many companies have gone into liquidation and escaped liability.

Cuts in benefits are also set to rise again in the December budget and tax is to be introduced for those on even the lowest incomes. A public sector hiring freeze will mean yet more attacks on healthcare, education and all social provision. Local protests are taking place all over the country at the closure of hospitals. Unions outside the public sector are voicing their refusal to accept wage cuts. There is every chance that there will be resistance to the December budget - but the working class lacks confidence and any real strategy.

Hostility towards the government is endemic. People are fearful about their futures and capitalism is seen as a hoax - which has left millions reeling under intense debt. There seems every possibility of the left making progress in the present period. Still, as yet the left has not managed to give voice to opposition in any programmatic way. The two main left groups, the Socialist Worker Party and the Socialist Party have continued to focus on the politics of protest, rather than direct their attention to the need to build a Marxist party in the here and now. The need is urgent to campaign for that party, rather than set up yet another anti-cuts campaign. The problem is political.

The left in Britain also needs to consider the experience of the Irish working class. In February 2009 over 120,000 marched in Dublin, with many other significant demonstrations throughout the country. On November 25 250,000 public sector workers took part in a one day strike. It seemed that the tide was turning in our direction; but the working class lacked a political leadership that could take on and defeat the government. Instead the protests ebbed away and the union leadership sold the strikes out.

The bitter medicine was swallowed and now the bourgeoisie are coming back for more. They are determined to make the working class pay for their crisis. We as Marxists must address ourselves urgently to the task of building a united working class party based on the need for revolution. People can see that capitalism does not work - the burning question is what to replace it with.

Anne Mc Shane