A clear lesson is coming from Ireland—cuts and austerity do not end recession, and they can make it worse.
Irish gross domestic product fell by 1.2 percent between April and June.
The government’s policy of cutting wages and slashing public sector jobs has simply deepened the recession.
Ireland and Greece are the only two countries in Europe where the recession has deepened this year.
The “Celtic Tiger” boom in the 1990s was supposed to be the success story of European
neoliberalism. But now the country is undergoing a traumatic economic crash.
A £375 billion two-year government guarantee covering the debts of Ireland’s six domestic banks expires on Thursday.
The government has so far had to provide £19.5 billion in aid just to keep one bank, Anglo-Irish, afloat.
The government is a Fianna Fail-Green coalition. Together they are pushing through cuts.
They have attacked benefit payments, wages and jobs to pay for the bank bailout.
After months of constant attacks on workers’ living standards, the response of the government to a double dip recession is more of the same bitter medicine.
The government has already indicated that public sector workers will get back none of the “savings” achieved from a freeze on public sector recruitment.
And the government is preparing another austerity budget—its fourth in two years.
Prime minister Brian Cowen is looking weaker than previously.
A minor outcry broke out when he mumbled through an interview recently either drunk or hungover. It was symbolic of a government running out of steam.
The government is refusing to call three by-elections precisely because the ruling parties will get hammered at the polls.
Sections of the Irish trade union movement have consistently adopted a strategy of keeping a lid on protests in order to maintain a “partnership” approach with the government.
This strategy saw union leaders disastrously agree to 17,000 public sector jobs being cut.
But there are signs that this approach is starting to crumble as the cuts are implemented.
Dublin City Council called on people to support a march to parliament on Wednesday of this week. The motion was moved by an ex-Sinn Fein councillor and actively supported by People Before Profit councillors.
Parts of the union movement are pushing seriously to get people involved in protests.
The government may not last many more months as various politicians look for exit strategies to hold onto their seats.
But the key question is whether the unions are prepared to break from the partnership model and fight back.