Ireland’s new Fine Gael-Labour coalition government has announced that it will pump a further 24 billion euros into the toxic Irish banking system. That is on top of the 46 billion euros committed by the previous government.
During the recent Irish election campaign both government parties had promised to renegotiate the IMF-EU deal and to impose some “burden sharing” of banking debt on senior bondholders: “The Irish taxpayer should not be held responsible for the private debts of banks”. Labour was even more strident promising to confront the EU and declared it was “Either Labour’s way or Frankfurt’s way”.
However, last week, a mere twenty-one days after taking power the government conceded that it would indeed be “Frankfurt’s way”, announcing that the bank bailout would cost in excess of 70 billion euros with all talk of “burden-sharing” disappearing.
Ireland has been in recession for three years, precisely because of this policy of pandering to financial interests—at home and abroad.
The crushing debt will only prolong the recession and bring closer the possibility of a sovereign debt default.
More cuts and job losses are guaranteed as long as we continue to bail out these institutions and their gambling debts.
In order to attempt to pay these crushing debts Irish taxpayers will face a further 6 billion euros in budget cuts this years.
The only victors are wealthy “bondholders” and the European banks who simply cannot believe their luck. For the past few weeks some canny speculators have been buying up the bonds of toxic Irish banks at knockdown prices on “secondary markets”. They will now make a fortune at our expenses because our government is honouring the full debt.
So too will the shareholders of British, German, French and US banks. These speculators are owed billions by Irish banks and could have faced bankruptcy because their ‘risk taking’ activity went wrong. Now they can rest easily in their beds as the Irish population faces economic ruin to save their fortunes.
All of this shows why the priority of socialists in the coming months has to be the building of a strong left wing party that will fight for the interests of working people.
If Fine Gael and Labour are permitted to continue with these failed policies the country will be devastated for generations to come. The majority of Irish people are opposed to this EU-IMF deal but have been denied any real say. But we will not get this from parliament. In order to fight for this Irish people need to get back on the streets.
We want to follow the lead of the people in Iceland. Last year they demanded the right to have a referendum on their IMF deal and in March 2010 a massive 93 percent of the people rejected it.
When socialists say we should default or “burn the bondholders”, people ask what we would do then.
It’s simple. Some 57 billion euros is in the hands of just 300 Irish people. These people are 6.7 billion euros wealthier than they were last year.
That figure is more than the amount saved through all the budget cuts imposed on the poor and working people through social welfare cuts.
We are part of a campaign against bank bailouts and demanding a referendum on the International Monetary Fund-European Union deal.