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Ireland’s rage at the bankers

This article is over 13 years, 5 months old
The Irish bailout is a scam to give money to Ireland’s government so that it can pass it on to Irish and international banks. The bailout even includes the government throwing £15 billion more of its taxpayers’ money into the pot to further help the bankers.
Issue 2230

The Irish bailout is a scam to give money to Ireland’s government so that it can pass it on to Irish and international banks. The bailout even includes the government throwing £15 billion more of its taxpayers’ money into the pot to further help the bankers.

Despite early threats that top finanicers might lose some of their money, the terms of the deal ensure that “senior bondholders” who lent money to Irish banks will not lose a penny.

“The question of imposing losses on bondholders was debated intensely among ministers on Sunday,” reports the Financial Times.

“While it would be politically popular in Ireland, European policymakers were concerned that it could again unnerve markets just as they were trying to reassure them and bring the crisis to a halt.”

Anything not to unnerve the markets—but the Irish poor must pay and not complain.

The deal brokered by the International Monetary Fund (IMF), European Union (EU) and the European Central Bank (ECB) is about saving the European bankers who lent hundreds of billions to Irish banks.

The global vultures want to prop up the Irish banks to stop the wider system lurching downwards again.

They fear “contagion”—the crisis of confidence in the banking system spreading across Europe. Portugal and Spain are both under pressure to make cuts to satisfy the bankers.

The cost of insuring Belgium’s debt has risen to to record levels.

In repsonse European leaders are putting in place a permanent mechanism to deal with those states that “live beyond their means”.

This will be a continent-wide cuts machine.


The head of the EU bailout fund, Klaus Regling, has admitted “drastic conditions” are attached. Ireland must pay an average of 6 percent on the money it will receive from the deal. That’s even higher than the 5.2 percent demanded from Greece.

One sideshow is Tory chancellor George Osborne lending billions to Ireland, claiming he was “helping out a friend in need”.

In fact, by putting up a loan, the British state will make sure that it gets first or second call on ensuring that British banks are paid off.

The Royal Bank of Scotland alone is owed £53 billion. In contrast for the next ten years Ireland will take an extra £1,000 from every man, woman and child in the state every year!

This has led to a massive political crisis in the ruling coalition government of Fianna Fail and the Green Party.

The Irish government may yet fall, and it may not get the austerity budget through parliament.

It is dependent on the votes of two independent TDs (MPs) who have little reason to continue supporting it.

At a press conference Irish journalist Vincent Browne asked prime minister Brian Cowen, “Why can’t you see you’re a liability, not just to your party, but to the country. Why don’t you get out now?”

The Greens have called for an election early next year, but have also announced they will support the austerity budget.

Their leader, John Gormley, said “People feel misled and betrayed.” He’s right—but betrayed by the Greens as much as by Fianna Fail.

A by-election last week, which the government had hoped to avoid but was forced into holding by the courts, saw Sinn Féin win with nearly 40 percent of the vote.

This has encouraged sections of the Irish trade union movement to put all their hopes on the Labour Party getting elected in the imminent general election.

But this leads away from struggle—and Labour is committed to cuts to pay off the bankers.

The huge demonstration last Saturday (see page 16) shows the potential to change the balance of forces in Ireland from the bankers and the bosses to the workers.

What went wrong with the Irish economy?

The “Celtic Tiger” boom in the 1990s was supposed to be the success story of European neoliberalism.

The boom had been fuelled by US investment, as its multinationals used Ireland as an entry point into the EU.

At one stage Ireland attracted a quarter of US investment in the EU, despite having just 1 percent of the EU’s population. But the money dried up as US companies sought cheaper opportunities elsewhere.

The Irish state responded by encouraging a property bubble. By 2006, construction accounted for 20 percent of gross national product.

One in seven workers were employed in the building industry. Tiny villages were transformed into huge commuter towns as houses, hotels and office blocks were thrown up. Irish banks lent well over £100 billion.

They came to believe that they could walk on water. Huge bribery scandals involving politcians at local and national level saw developers pay backhanders to get planning permission and influence decisions about construction projects.

At the same time, the Irish ruling class assumed that by acting as a slightly shady “back office” for the City of London they could attract highly mobile finance to Dublin.

In 2006 alone around £450 billion flowed into hedge funds based in the massive Irish Financial Services Centre building.

Some 70 percent of these funds were actually held in a tax haven in the Cayman Islands. While the speculative boom continued, the union leaders helped hold down wages.

They claimed that in return they gained influence in the corridors of power. That whole edifice has now collapsed.

The main bosses’ party Fianna Fail is in government in coalition with the Green Party. The Greens had previously portrayed themselves as left of centre.

Together they have pushed through massive cuts.

In September 2008 the governent tied the Irish state’s fiscal fortunes to those of the banks, forcing through austerity to fund a bailout.

Nearly 300,000 workers struck against the cuts in 2009. But the union leaders called off further action.

Instead they tried to trade 15,000 redundancies and new forms of flexibility for a promise to withdraw the pay cuts.

The government, of course, did not go back on the cuts.

But it came unstuck as the property bubble burst and the global rich stopped putting their money into Irish banks.

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