Bailing out the Irish Banks... again

The announcement that the Irish banking sector needs another €24 billion, that’s €24,000,000,000 in real numbers or another €5,500 for every Irish man, woman and child, is another sign of the capitalist crisis in the state. Standard and Poor’s one of the main international credit agencies has now downgraded Ireland by a further point.

The democracy of Parliament is in short the democracy of Capitalism. Capitalism gives to the worker the right to choose his master, but insists that the fact of mastership shall remain unquestioned; Parliamentary Democracy gives to the worker the right to a voice in the selection of his rulers but insists that he shall bend as a subject to be ruled. The fundamental feature of both in their relation to the worker is that they imply his continued subjection to a ruling class once his choice of the personnel of the rulers is made... (James Connolly, Parliamentary Democracy, 1900)

The state seems to be heading full steam for the rocks, a mere 6 weeks after FF walked the plank and Captain Enda lashed himself to the wheel. The fact that there was still a crisis won’t be a surprise to anyone, but the scale of the problem is very significant. Lenihan’s pronouncement that AIB would need €34 billion (but it could be €46 billion) was seen as clear evidence of a government on the slide. But the new information from the Central Bank is part of a jigsaw that will become increasingly clear as the pieces fall into place over the next period. Fine Gael and Labour have come into power in the midst of an economic cyclone and the coalition will be a government of crisis from its inception.

The same conditions that prevailed in the economy before the election still exist, but if anything the latest stress tests demonstrate that FF didn’t give the full story when the bailout was negotiated at the end of last year. The price of houses is now reported to have fallen by 51% over the last three years, unemployment is still a huge issue and the € has increased in value against the £ making exports more difficult and the lure of Newry more attractive for Irish shoppers. The increase in the price of oil, following on from speculation connected with the revolutions in the Middle East and North Africa, will have a big impact on the economy in Ireland, because of the heavy emphasis on trade and the remoteness of Ireland from the rest of the euro zone.

The austerity measures implemented by FF and the Greens haven’t been reversed. Sure, there may be some tinkering at the edges, but the same pressures will be brought to bear on Michael Noonan and Enda Kenny as on Brian Cowen and Brian Lenihan. The bosses want their pound of flesh and it won’t be long before the knives are out, particularly for the public sector.

Despite the protestations of Eamon Gilmore and the view among the right wing of the Labour Party that Labour needed to be in government to defend the working class, it is very unlikely that Labour will be able to stem the tide. The changes in the figures for reductions in the public sector workforce in the Programme for Government might sound promising, but it has to be borne in mind that the shifting sands and turbulent currents in the economy and internationally make any “deal” very tenuous in the extreme.

Labour’s left argued that a principled opposition was better than a sorry compromise with Fine Gael and that position should gain ground over the next period. But it will only gain support if it develops a clear class alternative to the “National Government” position of Gilmore. Ideally, the United Left Alliance can play a significant role in that process, but there is a risk that the ULA will fail to develop into a significant force as a result of sectarian baggage. Ireland has a significant tradition to the left of Labour, but it is fragmented and weak. There is no equivalent of the Spanish Izquierda Unida, the German Die Linke or the Greek Synaspizmos. The ULA organises around a handful of individuals.

The battles against austerity in Ireland will be fought by trade union members and young people. Sooner or later that pressure will be reflected in the Labour Party also. To transform Ireland along socialist lines the workers of Ireland need to wrest control of their organisations from the bureaucrats and time servers, the careerists and the ideas of reformism. There are no short cuts. The crisis in Ireland will transform the consciousness of working people, time and time again. It’s time to think big.

...But the freedom of the revolutionist will change the choice of rulers which we have to-day into the choice of administrators of laws voted upon directly by the people; and will also substitute for the choice of masters (capitalists) the appointment of reliable public servants under direct public control. That will mean true democracy – the industrial democracy of the Socialist Republic. (James Connolly, Parliamentary Democracy, 1900)