Ireland: Austerity attacks, the working class and prospects for the left

"Huge class conflicts ahead"

What is behind the bailout for Ireland and will it work?

The immediate reason was to safeguard key banks in the EU’s main countries including Germany, France and Britain, but also to calm the position of Portugal and Spain in the money markets and the instability affecting the Euro.

Angela Merkel’s comments that bondholders should take some of the losses from the banking and debt crises, provoked the "markets" to attack Ireland’s financial position in order to force a bailout which would guarantee that they would get paid. The EU duly obeyed the diktats of the markets.

The Irish banks, who are basically insolvent and shut out of the international money markets, were on the brink of a new crash and that would immediately have hit all the European banks that had loaned them huge amounts, as well as the ECB which had given them €90 billion in the recent period.

It hasn’t worked yet, as the Irish banks, the Euro and Portugal and Spain are still very unstable. There is no motor capable of pushing the Irish economy into growth in the short or medium term. The crisis will also be made worse by the austerity programme agreed and so, rather than improve the situation for Ireland, the bailout will just make the debt crisis worse and default inevitable.

The austerity programme by the government is massive. What will it mean for Irish working people and youth?

The budget agreed on 7 December included cuts of €6 billion, with another €9 billion to follow in the next three years. By 2014, they plan to have cut budget spending to nearly 50% of the 2007 level!

Already, Ireland has a much weaker provision of public services compared to the Eurozone and such cuts would cause chaotic dislocation and have a devastating affect on peoples lives.

Ireland would become an economic wasteland, with unemployment likely to soar way beyond 20%, leaving the mass of young people with two options, emigrate or fight back.

What has been the response in the working class so far? There was an initial big demonstration. Will we see a revolt in Ireland like in Greece?

Around 70,000 demonstrated against the EU/IMF austerity plan on 27 November in Dublin. The numbers would have been much greater but biting hail and freezing cold meant many could not get to the march.

What was most significant was the mood and consciousness of the demonstrators. Despite the pressure for “unity” on the march, the trade union leaders were booed by a large section of the crowd because of their inaction, with people shouting "off, off, off!"

The Socialist Party sold more than 500 copies of our newspaper, The Socialist, and 5,000 people attended an alternative rally after the trade union leaders had left the streets. Our call for a one day general strike, put forward by Joe Higgins MEP, got a very enthusiastic response at the alternative rally.

With an election likely in February, combined with a lack of a lead from the trade unions, it is possible, even likely that people’s first response to the budget and austerity plan will come through political channels, with a hammering of the Fianna Fail / Green Party government out of office. But resistance to this austerity is inevitable and there will be huge class conflicts in the months and years ahead.

Given that it seems that an early election is inevitable, how will the left respond?

Some months ago, the Socialist Party initiated discussions amongst left groups with a view to launching a left/socialist challenge in the general election. On 29 November, the United Left Alliance was launched at a packed meeting in Dublin, attended by 400 people, on a night when the weather was Baltic!

The United Left Alliance is comprised of the Socialist Party, the People Before Profit Alliance and the Workers’ and Unemployed Action Group in county Tipperary. The ULA has gotten a lot of publicity and interest and it is likely to stand candidates in more than half of Ireland 42 parliamentary constituencies.

The next weeks and months will show if the ULA taps a mood, but we are confident that now is the right time for this initiative. The ULA will oppose all cuts and austerity; says that neither the debts of the Celtic Tiger profiteers or the bondholders should be paid; calls for the nationalisation of the banks and the launching of a infrastructural and social development programme to provide for peoples needs and create hundreds of thousands of jobs; and for the democratic public ownership of the wealth and resources.

The ULA has a prospect of getting a group of TDs (MPs) elected and in the context of a worsening crisis and with the likely involvement of the Labour Party in a coalition government, the ULA could become a powerful focal point for mobilising opposition and for the launching of a new party to really represent working class people, which could have a huge impact on Irish society, even in the near future.

What is the Socialist Party (CWI in Ireland) demanding?

On top of the demands of the ULA already mentioned, the Socialist Party says end the reliance on the markets for investment and jobs. There has been a 50% collapse in investment in the Irish economy. Generations will be allowed to rot in unemployment before the bosses will even consider investing seriously in the economy.

We need to scrap capitalist ownership of this wealth and resources now and implement socialist policies that plan the economy for peoples needs not for profit. The money markets, the hedge funds etc, must also be taken into democratic public ownership, but that raises the need for united international action by the working class.

We stand for co-ordinated action of all workers across Europe to fight the austerity of the EU and for a socialist federation of Europe, as the only way out of this mess.

Kevin McLoughlin, National Organiser of the Socialist Party and co co-ordinator of the United Left Alliance.

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December 2010