Irish workers refuse to pay for the banks' profiteering

29 November 2010

Last Saturday's national march called by the Irish Confederation of Trade Unions filled the streets of Dublin with 100,000 protesters - the largest protest ever in the Republic's history. And the countless hand-written placards held by the protesters spelt out their anger in no uncertain terms against the banks and their lackeys in government.

Yes, the Irish working class has every reason to be angry. Having been faced already with two rounds of cuts, it is now facing another, even more drastic turn of the screw, in order to allow the government to make up for more losses which had been hidden so far by the country's banks.

Attacks against the working class

All the details of this turn of the screw will only be published on 7th December. But it is already known to involve £8bn in cuts and £5bn in new taxes by 2014 - which, in proportion to the size of the population, would be the equivalent of a total £182bn budget squeeze in Britain, more than twice what Osborne wants to get us to swallow by 2015! Worse, 40% of these cuts are to be implemented straight away, from January.

Like here, most of the cuts are targeted at the working class and poorest. All benefits stand to be cut by around 11% and more punitive measures are to be introduced against the jobless, at a time when unemployment runs officially at 13% with no jobs in sight! And plans to cut around 14% of public sector jobs are bound to make things even worse.

Wages will be cut by 10% for new public sector entrants, while public sector pensions will take a 4% additional cut, including for existing pensioners. The state pension will be frozen in nominal terms for 4 years at least (meaning that its real value will go down by the rate of inflation) while retirement age will be postponed to 66 and, eventually, to 68.

On the tax side, allowances will be reduced so that more poor working class households will have to pay taxes. At the same time, water charges and a new tax, comparable to the council tax, is to be introduced, while VAT is to be increased from 21 to 23%. Of course, there is no question of increasing taxation on the very rich, nor of increasing the derisory 12.5% corporation tax which was introduced by Irish politicians to attract big foreign finance businesses.

All this is supposed to "save public finance and the economy". But what gives the game away is the fact that the government also plans to cut the minimum wage (only paid by private bosses) by more than 11% from January - more proof that this is really all about boosting capitalist profits, as the Dublin protesters understood very well.

The dirty hands of british capital

In the ranks of the Dublin march were banners blaming the EU and IMF for this round of cuts, since it appeared as part of Ireland's £74bn international "rescue" package. Except that, with or without this "rescue", the Irish politicians would have used public funds to bail out Irish banks, just as they have done since the beginning of the crisis, exactly in the same way as it happened here.

On this occasion, just like the Irish or British governments, the EU and IMF are acting as trustees of their own bankers. They forced Dublin into this position not in order to "rescue" Ireland's state finance nor its economy - nor even to protect the euro - but to rescue the profits of the European and American banks which have lent large amounts of funds to Irish banks in order to make a quick buck out of the real estate speculative bubble that was developing there before the crisis broke out.

It is for the very same reason that Osborne has stepped in. Because Britain's big banks were up to their necks in the Irish bubble as well. So much so that, by now they are the largest lenders to the Irish economy. London developers also borrowed large funds via Ireland, for tax reasons, and if Dublin was to withdraw the state lifeline to Irish banks, forcing them to recover outstanding loans, many of their prestigious developments would be in trouble. Not to mention British companies, which monopolise 1/3 of Irish imports!

The problem facing the working class, in Ireland just as much as here, is this profit system which has become so unstable that it behaves like a mad boomerang, causing damage all over the economy. Neither in Ireland, nor here, can anything be expected from politicians and trade-union leaders who tell us that there is what they call a "better, fairer way". The truth is that there can be no solution within this bankrupt capitalist system. In the meantime, the only way forward is to stand up and use our collective strength, as our Irish brothers and sisters began to do in Dublin, to stop the politicians and bosses in their tracks.