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Ireland’s Gordian knot:

An opposition that’s not an opposition, a solution that’s not a solution.

John McAnulty

30 August  2010

Promises of a substantial trade union opposition to the Croke Park agreement endorsing a government austerity package have failed to materialise, yet at the same time the latest reports on the banking debt make it clear that the austerity drive can’t resolve the crisis or even allow the Irish economy to continue in business. 

In June the public sector voted on the Croke Park deal, effectively cutting their wages and also cutting jobs, services and promotions.  The result was a 60-40 split, with 60% of those voting agreeing that this was the best that the union bureaucracy could achieve and that workers had better accept it for fear of worse to come. There is no doubt that this represented a serious defeat for Irish workers.  There is no defeat more grievous than one you accept yourself.  However no defeat lasts for ever and most militants comforted themselves with the thought that a 40% opposition was a significant one and represented a reasonable base for a fightback.

Unfortunately the 40% opposition has turned out to be effectively 0%, as the members of the opposition camp swung around and joined the majority. The first to lead the rout were the self-styled hard left of the unions in the form of UNITE.  Within weeks of the vote they had agreed to accept the Croke Park deal “to avoid victimisation”.  Now they have been followed by ASTI, one of the secondary teachers unions, with a special conference planned to sign up.  Even among those who have not converted to the yes camp, such as the leadership of TUI, the basis for their case – that social partnership between the bosses and the ICTU bureaucracy should only be binding in relation to pay and that every union can take a different position on conditions of service – is so thin and threadbare as to utterly fail as an opposition pole of attraction.

The reality is that the 60-40 vote on the Croke park deal was not a vote representing different currents of workers but rather a vote representing different currents of the bureaucracy.  By and large, under the pressure of events, workers have held fast to their existing leaderships and have tended to vote in line with the recommendations of the leaders of the individual unions. The decay of the Croke Park debate shows that left/right divisions in the bureaucracy end up with the ‘left’ bureaucrats making their peace with the right.  The bureaucracy by themselves are simply not the base of any determined opposition to the current offensive.

The fact is that the Irish trade union leaders are fervent supporters of Irish capitalism and are unable to conceive of any alternative. They also accept the standard model of the Irish crisis - that we have to bail out the banks to maintain the confidence of the international bond market.  If we do that and take the pain then in a few years the international economy will recover and the boom days will return to Ireland.  So every element of the bureaucracy supported the bail out and the creation of NAMA.  The ‘left’ position was to ask for some social investment to balance the cuts, to ask that workers only pay their fair share and to ask for the medicine to be stretched over a longer time period.  The yes and no votes were therefore only tactical.

Unfortunately the evidence of collapse of opposition is accompanied by growing evidence that the standard model is wrong.  The major piece of evidence was the news that Standard and Poors, the international ratings agency, has downgraded Ireland's credit rating from AA to AA-.  By itself that would be worrying enough and is part of a longer-running spiral.  Doubts about the Irish economy lead to changes in the credit rating. This in turn means more interest has to be paid on the massive debts guaranteed by the government. Paying out more in interest means a greater debt burden and this in turn leads to further doubts about the economy.

Even more serious is the discussion in the international markets about the Irish economic plan, some of which are included in the Standard and Poors analysis.  The bond market does not accept:

  • That the assets held by NAMA have any current value.
  • That the bailout is “off balance sheet” and should not be counted as sovereign debt. Standard and Poors have added the NAMA debt to the overall debt and arrived at a figure significantly grater than 100% of GDP. The playing about with figures by the Fianna Fail hucksters has simply been ignored.
  • Fundamentally the bond market is beginning to question the whole basis of the Irish plan. Irish capitalism, in blind panic, has offered an unconditional guarantee to investors and speculators. That guarantee is beyond the capacity of the Irish economy, but the Irish government fear that any reduction will lead to a collapse. It is becoming evident that failure to limit liability will also lead to collapse.
The S&P report was the subject of a storm of denial by government supporters.  Unfortunately for them, their denials were followed almost immediately by the release of a financial report on the black hole of Anglo Irish bank that proved that Standard and Poors, if anything, were being too optimistic.  The bank lost 8.2 billion euro, representing by far the biggest commercial loss in Irish history.   The fact that part of the loss was due to the ‘haircut’ or discount involved in the transfer of bad debt to NAMA and part due to the holdings retained by the bank falling further in value as recognition of the depth of the property market crash continued to sink in.  The governor of the bank was not able to put any top figure on the cost of the bailout.

The response of the government was for the coalition to start to split. The panicky Green minority proposed dumping Anglo-Irish immediately before the economy melted into the core of the planet. The Fianna Fail majority are proposing to the European Central bank that the bank be divided into a tiny good bank and massive bad bank.  In any case they assure everyone that the latest figure for the bank losses of over 38 billion euro is “difficult but manageable”.  An exasperated columnist, Fintan O’Toole  of the Irish Times, remarked that Fianna Fail had been saying that when the debt had been 5 billion.  If, as was perfectly possible, the Anglo debt reached 50 billion, the interest payments on the total Irish debt might reach 4% of national income and extend indefinitely into the future. The fact is that this is not sustainable and effectively Ireland would be bankrupt.

True to form, the trade union leaders have reacted to the growing uproar with silence. They have no view other than to follow their capitalist partners, no alternative to the status quo. 

It wasn’t the working class that caused the economic crisis.   Similarly no amount of punishment of the workers, even with the eager support of their existing leadership, will guarantee a resolution of that crisis.   Irish capitalism is bankrupt.  The issue is not whether the workers will give more to save the capitalists, the issue is if the workers will organise around their own needs and own program to resolve it in their own interests. That means opposing the trade union bureaucracy rather than constantly seeking to make common cause with them and adopting a revolutionary perspective rather than hesitating between imaginary advantages of European over American capital or Keynesian policies versus neo-liberal variants.  It means looking to the workers of Europe for solidarity rather that the European Central bank for more ways to pay the bankers and speculators. Workers are being asked to puzzle over an insoluble knot – an opposition that not an opposition and a solution that’s not a solution.  Its time to cut the knot with independent working class action and an independent working class program.


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