the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Jul 18, 2010
Not long ago, the Irish Republic, with its 4.5 millions inhabitants, was still being praised for its "economic miracle." But it was the first country of the eurozone to be hit by the crisis and among those hit hardest. Threatened by bankruptcy, the Greek state was the main focus of the European media. But a new episode of the financial crisis was developing in Ireland. This is the subject of an article published by British comrades of Workers’ Fight in their magazine Class Struggle, #87, April-June 2010. We are reproducing below large excerpts from this article.
With the banking system beginning to reveal yet more losses, Brian Cowen’s coalition government—regrouping the traditional right wing party, Fianna Fail, and the Green Party—announced at the end of March another state bailout of the banks.
These developments came as a shock in Ireland. It seemed as if history was repeating itself all over again. Eighteen months after the September 2008 banking collapse had led to the first bailout of the banks, a new collapse prompted the government to announce a new bailout, which requires even more public funds than the previous one!
In the meantime, on January 1st the workers were hit by a new wave of austerity measures. These followed two earlier attacks in October 2008 and March 2009. In light of this new stage of the crisis and of the way in which the politicians and their capitalist masters are planning to address it, it is clear that the greed of big business, whetted by Cowen’s earlier bailouts, has turned into a black hole threatening the very living conditions of the laboring classes.
The situation in Ireland has a lot to do with the particular kind of parasitism of the country’s tiny—but very rich—bourgeoisie.
The Irish domestic market being too small to satisfy their appetites, the Irish bourgeoisie sought from the late 1970s onwards to use the country’s position in the Common Market to attract foreign investment and take their cut of the resulting profits.
Irish wages, already low, were kept low through a policy of national binding agreements, signed by the Irish trade union leaders within the framework of a "Social Partnership." This legal framework was "sold" to foreign investors as a guarantee of social peace. The level of corporate tax was kept below that of the other European countries, while new investors were offered temporary tax-free inducement programs and ready-to-use industrial zones.
This policy produced the so-called "Celtic Tiger" phenomenon which, between the late 1980s and the 2000 "dotcom crash," resulted in an annual rate of economic growth comparable to that of the so-called "Asian Tigers," like South Korea and Taiwan. Of course, this growth benefitted Irish capital much more than the population. In the long term, most of the foreign companies that installed themselves in Ireland were primarily attracted by tax incentives and direct access to the European market. The workforce they employed was mostly skilled and not very large. So even though these companies accounted for 50% of manufacturing production by the mid-1990s, they did not help to reduce significantly the country’s chronic underemployment, nor to increase the standard of living of the working class as a whole.
All this came to an end in 2000, when foreign investment dried up. Foreign manufacturing companies began to cut jobs, close factories or even withdraw altogether from Ireland.
Irish capital itself was still able to expand in another direction—extending its parasitism. Already, during the 1990s, an International Financial Services Center had been set up in Dublin, offering financial companies all the modern facilities they could expect in London or New York, but at a much lower cost and with a far more benevolent tax and regulatory system. Among other advantages, corporate tax was 12.5%. By 1997, Dublin had become Britain’s largest offshore fund management center, with 600 speculative funds managing total assets equivalent to two thirds of Ireland’s entire GDP!
So, while Irish workers were being thrown on the junk pile, Irish capital had already prepared to move into financial speculation. This financial activity increased in Dublin exponentially over the following years.
This financial explosion was partly a by-product of a worldwide phenomenon—the huge flood of floating capital which, having left the sphere of stock market speculation, went on to seek new ways of making a quick buck. But it was also partly due to the specific conditions Ireland offered.
Indeed, when the predecessor of the eurozone was formed, in the late 1990s, interest rates across all member countries were progressively aligned. In Ireland, where the level of interest rates and inflation had been comparatively high before, this process resulted in interest rates falling far more than the rate of inflation. So much so that, for most of the ten years preceding the present crisis, real interest rates (i.e. once inflation was deducted) were negative in Ireland. As a result, the cost of borrowing in Ireland became one of the lowest in the industrialized world, provided the money borrowed was invested locally. Given the additional advantage of Ireland’s particularly lenient tax and regulatory structure, this promised huge pickings for floating capital.
The large foreign deposits which had already settled in Ireland for tax purposes fed the expansion of credit. Speculative funds, usually registered in one of the numerous tax havens located in the backwaters of the imperialist countries, set up Irish investment affiliates aided by the local banking system. Once this process was set in motion, the demand for more capital attracted more inflows, feeding a more and more feverish speculation.
This was the basis on which the Irish property and financial bubble began to develop in 2000, even before it did in the U.S. or in Britain. This phenomenon and the mechanisms behind it were similar to what was about to happen, over the following years, in most industrialized countries. But the mass of capital involved in Ireland was much larger than in any other industrialized country compared to the size of the local economy. Being proportionally much more inflated, this speculative bubble was bound to be much more lethal when it burst.
The era of the "Celtic Tiger" was supposed to offer a bright, high-tech future with well-paid, highly skilled jobs for the Irish population. Instead, it gave birth to a massively parasitic economy which relied entirely on the fiction of a real estate market where prices would continue to go up and where there would always be buyers to pay for whatever crazy fantasies real estate developers dreamed.
For the best part of the decade before the present crisis, the real state of the Irish economy was concealed by this ever-inflating property bubble, itself fed by a proportionally expanding credit bubble.
The flow of credit artificially boosted the demand for properties, causing property prices to rise. Between 1998 and 2007, the average house price increased 250% in Ireland, compared to 200% in Britain and 120% in the U.S.
At one end of the property market, developers and builders, excited by the rising prices, were given access to unlimited amounts of cash at low interest rates, resulting in a crazy wave of construction projects, which took no account of the nature or volume of the real demand for properties. Commercial buildings and shopping centers were developed and equipped long before any buyer or tenant appeared. Large-scale high end housing developments were built without anyone knowing whether there would be buyers. This frantic drive to cash in on the property bubble was reflected in an unprecedented boom in the construction industry, whose workforce increased by 55% between 2001 and 2007, by which time, it employed almost as many workers as all the production industries put together!
At the same time, at the other end of the property market, buyers were lured by lending conditions designed to look very advantageous, although the banks did not offer low mortgage rates—which certainly accounts for the enormous profits they made during that decade.
As the ratio of house prices to disposable incomes was increasing to unprecedented and impossible levels (reaching over 200% by 2006 in Ireland, the second highest level among industrialized countries, behind Denmark), lenders found all sorts of tricks to hook in borrowers and keep the property market going. The average ratio of the mortgage to the value of the property increased year after year. By 2006, a third of first time buyers were allowed to borrow more than 100% of the value of the house. Likewise, mortgage lengths were progressively increased: the proportion of mortgages lasting longer than 30 years rose from 10% to 35% over the decade, and 50-year mortgages for non-commercial properties appeared for the first time in the country’s history.
As a result of this mortgage explosion, personal debt rocketed, from just under 100% of GDP by the end of the 1990s, to 215% in 2007.
The banking system thrived on this debt-driven speculative bubble. Between 2000 and 2007, the overall size of the banks’ balance sheet was multiplied six times—and in the case of Anglo-Irish Bank, almost 12 times. Anglo-Irish had the biggest involvement in large-scale property developments. The banks’ exposure went beyond Ireland. Although the Irish banks were not substantially involved in gambling on the U.S. housing market, they got their claws into the British property bubble through their subsidiaries on the other side of the Irish Channel and in Northern Ireland.
The credit bubble became so large that the huge foreign deposits in Irish banks weren’t enough to keep pumping credit into the speculative bubble. The banks’ reliance on short-term borrowing in the euro zone money market doubled to 40%. Thus the Irish banking system was loaded with risky lending and over-exposed to the ups and downs of the international money market.
One of the consequences of the "soft touch" financial regulation in force in Ireland was that it was something of a free-for-all, at every level. There existed a "financial regulator" but his passivity was legendary. In 2004, for instance, 200 cases of "overcharging" by financial institutions were identified by the financial regulator, but none of the culprits was charged or even fined: they were simply told to hand back the money they had effectively stolen. Moreover, the regulator refused to publish the names of the institutions concerned, claiming that this would go against "the public interest"!
What was true of small financial misdemeanors was even more true of much bigger ones. In 2005, for instance, the U.S. Securities and Exchange Commission investigated a huge speculative deal involving two of the world’s largest insurance companies—the now defunct AIG and General Re Corporation (part of the business empire of billionaire Warren Buffett). The SEC investigation exposed Dublin’s role in the shadowy world of international insurance. A New York Times report revealed that 56 multinational insurance companies had set up shop in Dublin’s insurance hub and that these local branches received 14 billion Euros a year in insurance premiums and managed assets worth 45 billion, almost a third of the country’s GDP. In fact, Ireland seemed to be on its way to overtaking Bermuda as one of the world’s big insurers because Ireland had become "the wild west of European finance," according to the New York Times article.
Of course, this laxity was even worse when it came to the speculative activities involved in the property bubble. By 2007, according to the Financial Times, the lending portfolios of the three largest Irish banks (Allied Irish Banks, Bank of Ireland and Anglo Irish Bank) were dominated by loans to speculative big property developments (respectively 60%, 71% and 80% of their loans in value). What was true of the big banks was just as true of the big credit-unions, regardless of the fact that their main field of activity should have remained, according to their own rules, to lend money to home buyers. For instance, Irish Nationwide, the country’s largest credit-union, had lent 80% of its household deposits to a small number of big property developers. Moreover these loans to speculators in big property developments were intertwined in highly suspicious ways. For instance, one widespread, but highly questionable trick involved using the same development (or rather its future profits) as collateral for different loans with different banking institutions—even though such practices should have been stopped by regulators, since they exposed the banking system to a domino effect should a developer default on just one of its loans. No step was taken against it.
But then, while many commentators warned against the increasing danger of a harsh landing, Irish politicians and regulators had other priorities. In other countries, the phrase "too big to fail" commonly referred to the big banks, meaning that the state would intervene should the banking system be threatened with bankruptcy. The Irish version of this phrase was "too connected to fail"—which referred to the general corruption of the system and, more specifically, to the close relationship between many politicians, particularly in the ruling Fianna Fail party, and the real estate tycoons who were making a killing out of this crazy speculation.
The whole property market and credit system was a house of cards whose stability was premised on a continuous rise in property prices. In fact the operation of the whole Irish economy had become dependent on it.
However, the real income of most of the population had not increased as a result of the boom. Jobs had been created in areas like construction, retail, services and in the public sector. But the wages they paid were not all that great in most cases, especially given the country’s high cost of living. Besides they had to replace the many jobs lost in the manufacturing industry of the "Celtic Tiger" years.
Leaving aside the construction boom, the only factor which ensured the expansion of the economy was the rise in domestic consumption which, in turn, depended almost entirely on the rise in property prices. Home owners increased their purchasing power by remortgaging their homes or taking a second mortgage—something that they could do only so long as the market price of their homes was increasing.
In mid-2006, however, property prices reached a peak, stagnating during the rest of the year. They began to fall at the beginning of 2007. At first, in so far as foreign money markets remained willing to lend to the Irish banking system, credit continued to flow, although mortgages became more difficult to obtain. But falling property prices led to property developers cancelling new projects and, in September 2007, the construction industry began to lay off workers. By April 2008, 39,000 jobs had disappeared in the industry, general consumption had started to slide and the retail industry was closing shops and cutting tens of thousands of other jobs. By that time, Irish banks were having to pay increasing premiums to borrow on the Euro money markets. They had increased interest rates on all loans and remortgaging had dried up, thereby reducing the purchasing power of the population as well as the demand for houses, contributing to the decrease in house prices. But the worst was yet to come.
The day after the collapse of U.S. giant Lehman Brothers, on September 15, 2008, stock in Irish banks and real estate companies began to fall. On September 29, Irish shares experienced their biggest fall in 25 years. During that one day, the shares of Anglo Irish Bank lost 46% of their value. The next day, Finance Minister Brian Lenihan stepped in with a banking bailout: all accounts and debt held by the country’s six largest banking institutions were to be guaranteed by the state for two years; capital injections would be provided to these banks if and when this was deemed necessary.
But this first announcement wasn’t enough to stop the banking system from seizing up. Within two weeks, faced with the risk of a wave of panic withdrawals by foreign depositors, Lenihan extended the state’s guarantee to all Irish-based banking lending and borrowing. This prompted an immediate inflow of foreign funds, seeking to benefit from a guarantee that no other state yet offered.
In proportion to the size of the country’s economy, this was a huge bailout. This blanket guarantee represented a potential liability for the Irish state of 500 billion Euros, equivalent to more than 300% of GDP, even before any fresh cash was pumped into the system and without introducing additional control over the banks.
Writing in the Irish Times, Morgan Kelly, an economist known for his harsh criticism of the credit frenzy, summarized the situation: "Irish banks are currently owed 110 billion Euros by builders and developers.... As the property bubble has burst, it is looking increasingly unlikely that banks will get back more than a fraction of this. In particular, very little of the 25 billion lent to builders to construct the ghost estates and vacant apartment blocks that now blight the landscape will ever be seen again.... Not only does the Government guarantee of bank borrowing fail to solve the underlying problem of bad loans; it faces the Irish taxpayer with a real risk of enormous losses.... Suppose that you are a bank that has lent 100 million Euros each to 10 developers who are having problems meeting their repayments. What you do is bundle the loans into one asset and sell it, with Brian Lenihan’s signature on the bottom, on financial markets for one billion Euros. When the borrowers default, the taxpayer will be left taking up the tab."
The fact that this bailout had not resolved the banks’ problems was exposed very quickly, when the slide in banking shares failed to stop. Three months later, Brian Lenihan finally resorted to the option he had always wanted to avoid—the part-nationalization of the country’s three largest banks through a massive injection of funds. Anglo Irish Bank was nationalized while the state took a 25% share in Allied Irish Banks and 16% in the Bank of Ireland.
In this last case, the National Pension Reserve Fund made a 16% injection into Bank of Ireland. Never mind what this will cost to pensioners!
The consequences of this bailout for the Irish state’s finance were almost immediate. Within three months of the announcement, the interest rate that the government had to pay to refinance its ballooning public debt on the international money market had increased by three percentage points—the largest increase by far across the Euro zone. This served as a pretext for the long series of austerity measures which followed, designed to make the working class majority of the population foot the bill for the speculative frenzy of the small layer of bankers and property speculators who, being "too connected to fail," had been bailed out by the government.
By the summer of 2008, the Irish economy was officially declared to be in recession. Jobs were cut left, right and center. In the first six months of 2008, layoffs increased by 27% compared to the same period in 2007 and applicants for unemployment benefits increased by 31%. Countless working class households were behind on their mortgages and often their utility bills. At this point, the government announced an emergency budget to reduce the growth in the government deficit.
This budget, finally adopted in October 2008, included a vast array of cuts. Forty-one state bodies were to be abolished or privatized. A whole series of programs were to be abolished—like that of a new cervical cancer vaccination program costing only 10 million Euros or 0.07% of the public health budget, a minute droplet in the ocean of the public deficit!
The announcement that automatic entitlement to a Medical Card (which gives access to almost totally free medical care) would be withdrawn from the over-70s caused a scandal. On October 22nd, an unprecedented protest outside the Dublin parliament brought together 15,000 pensioners from all over the country, some of whom were carrying angry signs saying "Just shoot us, it would be quicker." Likewise Lenihan’s decision to slap a 600 Euro increase onto the university registration fee brought thousands of students out in the streets.
But politically, the most important measure in this budget was a 1 to 2% tax on all gross wages and welfare entitlements, including the very lowest, which in reality was a wage cut. This unilateral announcement was a slap in the face for the union leaders who had just negotiated another "Social Partnership" deal in which they had made substantial concessions to Lenihan. They had agreed that the already scheduled general wage increase be cancelled and that wages be frozen.
The union leaders were not against the cut in principle, but now they had to "sell" it to their members! The union leaders protested vigorously. But they stopped short of demanding, for instance, that, instead of the workers, businesses and the wealthy be taxed for a bailout of which they were the main beneficiaries! In the end, union leaders claimed victory when Lenihan "conceded" to exempt earnings below the annual national minimum wage from the tax. At the time Lenihan boasted cynically that this would exempt 36% of the workforce, which probably says it all about real wage levels!
However, this was only the beginning of the anti-working class attacks. 2009 began with two almost simultaneous announcements: first, U.S. electronic giant Dell, Ireland’s largest high-tech manufacturing employer, was to cut 1,900 jobs or two thirds of the workforce at its main production plant in Limerick (on which 10,000 other local jobs depend); and second, the symbol of Ireland’s traditional industry, Waterford Wedgewood, was declaring bankruptcy and closing its last crystal factory. At the same time, union leaders were returning to the negotiating table to revise the previously agreed deal, following demands for more austerity by the government.
This time Lenihan demanded a 10% wage cut across the whole public sector. When this was turned down by the unions, the government produced an alternative—an increase of 7% in social security taxes, the deferral of all planned pay increases and a 25% cut on all non-wage payments. Lenihan then added that should his proposals be refused, he would declare an end to the "Social Partnership" framework.
This last threat set the union machineries into motion. They didn’t really object to some form of cuts. For instance, coming into these talks, Jack O"Connor, general secretary of SIPTU, the largest public sector union, had stressed that unions "have a responsibility to play our part" (in the austerity drive). Another public sector union leader, Dan Murphy, had endorsed the worn out threat of Ireland being forced to turn to the IMF, that some pro-government commentators were already using to try to push public sector workers into submission.
So, the union machineries launched a program of action, formally against the wage cuts but, above all, against the government’s threat to dump the "Social Partnership" framework. This campaign culminated, on February 21st 2009, in a 120,000-strong march called by the ICTU (the Irish Confederation of Trade Unions) in Dublin (something which was unheard of, in a city of 1.6 million). The next step was meant to be a series of votes for industrial action across the public sector leading to staggered strikes and to a 24-hour national anti-cuts strike, for both the public and private sector. But Lenihan did not take any chances. He rushed legislation through the Irish Parliament to raise social security taxes on March 1st. Lenihan then proposed to resume the suspended talks—and the union leaders proved more than willing to oblige, canceling all the strike actions which had been planned.
As it turned out, the measures which had been forced down workers’ throats were only for starters.
In fact, the government was not particularly secretive regarding its agenda, taking the pretext of its deficit, especially since the credit rating agencies had already downgraded the debt of the Irish state in March and they did it a second time in July.
An official report published in July outlined a program of "public sector transformation" aimed at achieving 5.3 billion Euros worth of expenditure cuts. Its main proposals included cutting wages, cutting 17,000 jobs (about 6% of the total), cutting welfare payments and increasing the number and level of charges paid by households for public services.
By September, even though it had not yet been officially endorsed as government policy, the impact of this agenda could already be felt. For instance services providing help to poor families and the unemployed were finding that their funding had suddenly dried up. This resulted in numerous protests called locally, starting in October, by SITU branches. This first wave of protest reached its highest point on November 3rd, 2009, with co-ordinated marches against the austerity drive organized in the main towns, involving an estimated 150,000. Then, on November 6, the ICTU launched its official "Get Up, Stand Up" campaign against the threatened cuts in the public sector. It was launched with a national day of action in which tens of thousands attended lunchtime rallies. The next step was to be a one-day national strike on November 24th.
By making a demonstration of their strength before the 2009 "Social Partnership" round of pay talks and the December budget, they were probably hoping that, this time, the government would not take the risk of pulling another fast one behind the backs of the unions’ negotiators.
But this did not mean that the union machineries were any more determined to organize the fight against the cuts than they had been at the beginning of the year. In fact, on November 24th, just as the ICTU’s one-day national strike was closing down all public services across Ireland, Peter McLoone, the head of the ICTU negotiating team and leader of IMPACT, one of the public sector unions, explained that it would be "necessary" to agree to temporary cuts in the public sector wage bill, that the July report on "public sector transformation" could serve as a basis for a negotiation and that "it would be possible to agree on an alternative that will achieve the savings the government requires." On the same day, SIPTU General Secretary Jack O"Connor gave insight into what the union leaders were willing to concede, when he had the nerve to state that "the boom has disproportionally increased pay and pay costs here against competitor countries"! What more could Lenihan have found to say to support his case for cuts?
In order to demonstrate their "goodwill" in the course of the talks, the union leaders actually called off another one-day national strike which had been planned for December. They came up with their own alternative to the government’s cost-cutting agenda. To avoid more wages cuts, they offered a compulsory unpaid leave scheme (equivalent to a 7% wage cut on average) and agreed to new negotiations based on the "public sector transformation" report. Lenihan had almost everything he wanted, but not quite: the cuts of the public sector wages which would weigh down on the wages of the working class as a whole. Besides, at a time when he was aiming at cowing workers into submission, there was no advantage in it for Lenihan to appear to be going along with the union leaders’ agenda. On the contrary, he had every reason to make it clear that he was calling the shots—albeit in the full knowledge that, of course, he could always rely on the union machineries to police workers into obedience if necessary.
So, on December 4th, the talks between the ICTU and the government collapsed, not because the ICTU walked out, but because the government did! Less than a week later, Lenihan announced the cuts he had kept up his sleeve all along as part of the December budget. Public sector wages were to be cut by 5 to 10%. Unemployment benefit were to be cut as well, by up to 50% in the case of those aged 20-21. Overall, all welfare benefits were to be cut by an average 4%. Prescription charges were to be increased by 50% per item, etc.
Logically, this should have spelt the end of the "Social Partnership" framework for the foreseeable future. But it did not. Over the next two months, the union leaders sulked ostentatiously in protest against Lenihan’s unilateral imposition of these cuts. As they had done before the December talks, they organized some protests—or rather, they allowed their local branches to organize local protests, without giving workers a chance to measure the extent of the discontent across Ireland. But as soon as the government winked in their direction, the union leaders rushed back to the negotiating table, this time, for talks on "public sector transformation" based on last July’s report.
The resulting document includes all the cuts outlined in the July report, although the exact number of jobs to be cut is not specified. But it also includes some additions. For instance, until 2014 (when the deal comes to an end), any pay increase will have to be self-financing through job cuts. In the meantime, the pay cuts and taxes introduced so far will remain. In addition, the deal introduces the notion that any public sector worker can be redeployed anywhere else in the public sector, temporarily or permanently. New hires in the public sector are to get worse pension provisions, etc.
The most recent figures available (at the time this article was written) show that Ireland has seen one of the largest falls in GDP among the industrialized countries (12.7% over the past two years). The stock of homes remaining empty despite being available for sale or rent is now equivalent to the entire production of houses in 2007-2008. Overall, since their 2006 peak, average house prices have dropped by 35%. But the price of land for real estate development is estimated to have fallen by as much as 80% on average. Government income has dropped by nearly 30% since the beginning of 2009 and its deficit is expected to reach 13% of GDP this year. In economic terms, this is a catastrophe which has no equivalent in Irish history since the 19th century.
This is reflected in the social situation. Due to the wage cuts, Ireland is one of the few countries in which even the nominal average wage has fallen, not taking into account the taxes and the cuts in social benefits. The rate of unemployment is officially close to 14%. But this figure conceals the fact that emigration has resumed on a large scale, with nearly 100,000 Irish emigrating over the past 15 months.
This is the backdrop in which the Irish banking system is revealing more deep cracks. A series of announcements, phased in over the first two months of this year, exposed the colossal extent of the losses that the country’s five largest banking institutions had been hiding in their vaults since the implosion of the Irish property bubble. In total, the five largest banks had 82 billion Euros in "toxic" loans, nearly half the country’s GDP, with the supposedly nationalized Anglo Irish bank holding about 38 billion.
Even then, these were only the estimates volunteered by the banks themselves. But there’s nothing to say these estimates reflect the real losses (and mad speculation) of the banking system, any more than past similar disclosures.
In any case, from the beginning of March 2010, banking shares began to face a speculative run. The 20% fall in Allied Irish Bank shares on March 29th, 2010 prompted the government to launch another bailout, this time on a much larger scale. A state-owned body, the National Asset Management Agency (NAMA), is to buy back 82 billion Euros worth of unrecoverable loans from these banks, for which the state will pay 52 billion, based on a valuation dating back to November last year. By a cynical twist, it was calculated that this choice of valuation date, rather than using the current market value of these loans, amounted to a 1.5 billion handout to the banks—equivalent to the total income provided by the public sector pension tax!
The role of NAMA is not just to bail out the banks themselves, it is also to bail out the real estate tycoons who borrowed these funds and now consider that it is the role of the state, and therefore of the working class majority of the population, to pay the bill for them.
In addition, the state is to inject a total of 22 billion Euros into the five banks. As a result, in addition to Anglo Irish which is already nationalized, the government will end up being the de facto majority owner of the four other banks, without any real control over their operations, and without any guarantee that more toxic assets will not emerge out of their vaults at some point in the future. More or less, the Irish state is already in suspended bankruptcy, suspended no doubt because a formal bankruptcy would imply unpredictable consequences for the British and U.S. banking systems. But for how long can this situation be sustained?
Such is the black hole created by the capitalist market for which the Irish working class is now supposed to pay an exorbitant price, with its jobs, wages, public services and conditions of living. So far, the workers have been trapped and paralyzed in their resistance against the attacks of the capitalist class by the "Social Partnership" policy of the union bureaucracy. But an explosion of anger caused by one austerity measure too many could begin to reverse the situation. Maybe a "Celtic Tiger" will revive after all, but this time one armed with a strong proletarian program, to fight to end the parasitism of capital and to free itself from the straightjacket imposed by the union machineries, accomplices of the bosses.
April 25, 2010 and updated July 18, 2010