Ireland’s new Fine Gael (FG)-Labour Party (LP) coalition government has set out an agenda of continuing the savage austerity and spending cuts of the Fianna Fail (FF)-Greens coalition ii has replaced.
The cuts are enforced by the International Monetary Fund-European Union bailout of the Irish government.
In the February 26 elections, FF and the Greens were thrashed in a backlash against the bail-out and the anti-worker austerity that goes with it. The Greens failed to win a seat in the Dail (Irish parliament) and FF slumped from 77 seats to 20.
Sinn Fein (SF) and the United Left Alliance (ULA) TDs (MPs) in the Dail accused FG and LP of betraying their electoral promises and ignoring the wishes of the voters. SF and the ULA ran on anti-austerity platforms and won 14 and five seats respectively.
The new government has announced plans to sack 25,000 public servants and admitted its promise to reverse a minimum wage cut was dependent on IMF-EU approval. Labour’s promise to oppose the introduction of water charges has also been dropped.
Despite the IMF-EU bailout, Ireland’s banking crisis remains dire. A stress test on four big Irish banks, completed by Ireland’s Central Bank on March 30, found the total amount needed to ensure the continued solvency of the banking sector has skyrocketed to 70 billion euros.
This adds to the 46 billion euros the state has already pumped into the banking system. The governor of Ireland’s Central Bank, Patrick Honohan, said on March 31 this was “one of the costliest banking crises in history”.
Irishtimes.com’s Eoin Burke-Kennedy reported on March 31 that, in response, Ireland’s finance minister Michael Noonan said “the government would reduce the number of domestic banks to two ‘pillar banks’, based around Allied Irish Bank (AIB) and Bank of Ireland”.
Sinn Fein’s finance spokesperson Pearse Doherty said in a March 31 speech to the Dail: “It beggars belief that this so-called alternative Government is to pump another €24 billion into the defunct banking system.
“This open-ended commitment to cover bank losses plainly exceeds the fiscal capacity of the state. The losses of the banking sector have become the losses of the taxpayer. Bank debt has become sovereign debt.
“And that is the problem and it is the ordinary citizens who are suffering for these failings… Nearly half a million people are unemployed. 50,000 of our young people are leaving our shores each year. A growing number of people face eviction.
“Families struggle to feed their children and provide warmth. These are the people Fine Gael and Labour want to foot the bill for the banks.
“The Government has not acted in the interests of the people today; it has acted purely in the interest of the banks.”
Sinn Fein has called for increased taxes on the rich and cutting the salaries of top public servants and politicians as an alternative to the anti-worker austerity.
Sinn Fein is also campaigning for the abolition of the Universal Social Charge. The USC, introduced in early 2011, is a flat tax of 7% applying to all incomes 16,000 euros and above.
Ireland’s Taoiseach (prime minister) Enda Kenny told members of the Dail on March 15: “No further monies will be put into the banks until we see how this responsibility can be shared.”
However, the ULA accused Kenny’s government of being “guilty of the monumental betrayal of its policy of honesty”.
The ULA has proposed the “democratic public ownership of the banks” rather than the continued use of taxpayers money to prop up the capitalist financial system.
ULA’s Dail member Joe Higgins said the government had “promised burden sharing. Instead the economic lifeblood of our country is being drained to pay for [the bank’s] gambling debt”.
The ULA, which was formed as an electoral alliance by left groups in November, has pledged resistance to the government’s austerity in the Dail and on the streets.
The ULA announced on March 28 plans for public meetings across Ireland as part of a membership drive aimed to help build the ULA into a new radical left party.
Wall Street Journal reporters David Enrich and Eamon Quinn said on March 30: “Ireland’s crisis arose from an epic property-lending binge that propelled Ireland’s economy for years. When real-estate prices started tumbling, it wrecked the banking sector.”
This same process, driven by reckless lending and deregulated financial sectors, led to the global financial crisis.
In response, governments in the US and across Europe have sought to shift the burden for the crisis, and the huge amounts of money given to private banks to try to save the financial system, directly onto working people.
The fallout from this process has been a monumental tragedy for ordinary people right around the globe.