This is a bankers’ and bondholders’ treaty
Across Europe, in the face of growing resistance at the polls and on the streets, the capitalist class is ramping up its campaign to terrify people into accepting its ongoing austerity. In Ireland a ’yes’ vote in the referendum on the EU fiscal treaty is pushed by the government and the bosses. Here Michael O’Brien explains why the Socialist Party in Ireland is campaigning for a no vote.
The ’austerity’ treaty referendum is the dominant issue in Ireland’s news media. The treaty which involves 25 out of the 27 EU members (Britain and the Czech Republic opted out) is the latest response by the European political establishment to the sovereign debt crisis.
The background to the referendum is the growing unpopularity of the government. Opinion polls show dissatisfaction with the government has swelled to 65%. The Financial Times reports that senior government ministers have faced verbal abuse on the campaign trail. The deputy finance minister was called "a waste of space" and "just a yes man".
But as Socialist Party TD Joe Higgins explains the establishment parties are "now holding an economic and political weapon to the heads of the Irish people to coerce them into voting ’Yes’ to their austerity Treaty on 31 May."
Their arguments in favour of this treaty involve a re-writing of recent economic history. Apparently, the crisis we face is at root a crisis of public spending and governments, particularly in the ’peripheral’ countries by not having balanced budgets.
The reality of course is that this is a crisis of capitalism and the particular form in which it began was in the banking and property sectors where the lending practices of banks across Europe fuelled property bubbles particularly in countries such as Ireland and Spain.
However both Ireland and Spain had ’balanced budgets’ before this crisis began. That has since changed because of the scale of private banking debt that has been taken on by governments.
The other side of the crisis is the collapse of private sector investment, a strike of capital which in Ireland has seen fixed capital formation decline by 65% since the crisis began raising unemployment in Ireland to 500,000 or 14% of the active population.
Carrot and stick
Like the second Lisbon Treaty referendum in 2009 the ’Yes’ side (which apart from the government principally includes the Fianna Fáil ’opposition’ and the employers’ organisation IBEC) is again using a combination of carrot and stick with the electorate.
Vague promises of growth, stability and jobs are promised if a yes vote is achieved. This does not wash with the public. The Socialist Party and the United Left Alliance, which the SP is part of, has pointed out that over 100,000 fewer people are at work now compared to the time of the Lisbon Treaty. The figure would be higher but for emigration.
Figures from the Central Statistics office show that more than 3,000 Irish people are leaving the country each month, the highest number since the Famine in the mid-19th century.
The absence of convincing positive reasons is acknowledged by a host of right wing economists and some opposition right wing TDs (MPs) who instead rely on the ’stick’ argument. They say that without passing this treaty Ireland will be denied access to the only source of emergency funding available to it (the European Stabilisation Mechanism) in the event of a second bailout being required – which everybody apart from the government thinks is a near certainty.
Therefore, we are told that Ireland and the other member states who are party to this treaty must (as required by articles three and four of the treaty) implement savage additional cuts in the years ahead to bring our structural deficit to GDP ratio to 0.5%.
Ireland’s estimated structural deficit for 2013 is 3.7% necessitating an additional €6 billion in cuts according to the Unite trade union. The corresponding total scale of additional cuts across Europe to meet these targets is estimated to be some €161 billion.
Articles five and seven empower the unelected European Commission and European Council to automatically place countries in effective administration if deficit targets are exceeded. Taken together the treaty essentially seeks to enshrine austerity in the law and constitutions of the signatory countries and preclude for example any expansionary budgetary policy of government borrowing to fund job creating public works projects and reverse the economic decline.
As Socialist Party MEP Paul Murphy points out, this is a bankers’ and bondholders’ treaty. It is about putting the working people and unemployed of Europe on rations so that as much bank debt as possible is paid on the back of destroying public services, wages and working conditions.
One of the biggest ploys used by the ’yes’ camp is to paint a picture that if the treaty is rejected then Ireland will be left isolated in Europe.
Rejection of austerity
However, the rejection of austerity by working class voters in recent weeks in Greece, Italy, Germany and Britain, and the collapse of the Dutch government because of its inability to process €16 billion of austerity, demonstrate to working class people in Ireland that their rejection of the fiscal compact will be welcomed by tens of millions of their brothers and sisters across Europe.
The broadcasting rules during the referendum campaign have forced the media to give 50% of time to the ’no’ side which in the main is the Socialist Party/United Left Alliance and Sinn Féin.
Our representatives, unlike Sinn Féin, have dealt with the question of Ireland’s borrowing requirements and funding needs in 2013 and beyond by calling for a cancellation of debt servicing, implementing wealth taxes and by raising the slogan of a socialist Europe as the only means of overcoming this crisis of capitalism.
The latest opinion poll claims the ’yes’ side is on 37%, ’no’ 24% and ’don’t know’ 37%. This is remarkable given the scale of scaremongering by the ’yes’ side and the fact that they outspend the ’no’ side by a factor of tens.
The FT accompanied Socialist Party MEP Paul Murphy as he campaigned in Dublin city centre and reported that "it is clear that working class voters are more likely to vote No than the middle classes".
Regardless of the outcome, the experience of the household tax shows that it is one thing to pass a law or effect a constitutional change on the basis of lies, fear and deception but it is another thing entirely to actually implement the cuts. We can look forward to stiff, active and sustained resistance to austerity in Ireland and across the continent in the months and years ahead.
See the Socialist Party (Ireland) website www.austeritytreaty.ie for detailed arguments against the fiscal compact treaty
The CAHWT conference held on Saturday 19 May called for a rejection of the EU fiscal treaty.
"Conference overwhelmingly endorsed motions calling for our campaign to be very active against this treaty and to make an appeal to the one million households who defied the government deadline for non-registration of the home tax to vote ’No’"
Ruth Coppinger, Socialist Party councillor in west Dublin
Household tax: Building mass opposition to the Fine Gael/Labour government’s austerity attacks
In July last year the Fine Gael/Labour governing coalition in the Republic of Ireland announced (as part of its agreement with the European Union/European Central Bank/International Monetary Fund ’troika’), that a new tier of local taxation would be introduced. It would begin with a €100 household tax, followed in 2013 by a fully-fledged property tax and in 2014 by an additional water tax – amounting to an overall annual charge of nearly €1,000 a household.
Since the Household Tax registration and payment deadline set by the Irish government passed on 31 March the Fine Gael/Labour administration has gone so quiet on the issue that campaign activists themselves, let alone the wider public could be forgiven for forgetting what has been achieved by the Campaign Against the Household and Water Taxes (CAHWT).
Applying the lessons and methods of previous non-payment campaigns such as the successful anti-water charges struggle of the mid-1990s in Dublin and the historic anti-Poll Tax campaign in Britain previous to that, a scale of non-payment and non-registration of some 50% of households has been built and maintained.
The amateur historians of the working class movement have already compared this scale of mass civil disobedience with the campaign of non-payment of Land Annuities to the British landlords in the 1930s and even the seminal struggle of Michael Davitt’s Land League of the late 19th Century, the movement that gave birth to the very word ’boycott’.
Perhaps these comparisons are a little premature as big tests for the campaign lie ahead but already over the few months since this unjust tax was introduced meetings of unprecedented size in living memory have taken place in nearly every suburb, town and village on this issue.
Socialist Party members and others on the left have been in huge demand to address people around the country.
It is estimated that around 30,000 people attended meetings; several thousand have stepped forward to organise the campaign in their community, a very extensive network for a country of 4.5 million people. The scale of the campaign is all the more impressive in the eyes of people because of what preceded it in the four years since the crisis began in Ireland.
A common refrain by many Irish workers and unemployed over that time was ’the Irish are not like the Greeks or French’ or whoever happened to be striking or demonstrating on our television screens at that particular moment. This was a narrative the media pundits were all too happy to promote.
It was modified to a degree by what they described as a ’riot at the ballot box’ in February last year when Fianna Fáil, after 14 years in government, suffered decimation on a scale similar to Pasok and New Democracy in Greece recently.
However in terms of active and sustained opposition to the austerity agenda the struggle had not risen above isolated local campaigns opposing specific cuts or the occasional large mobilisations by the Irish Congress of Trade Unions.
These demonstrations turned out to be exercises in ’letting off steam’ by the union leaderships and therefore, by themselves, failed to stem the savaging of wages thereby fuelling a further demoralisation of workers.
For these reasons the government’s announcement of the household tax and other taxes, was greeted by the media as a fait accompli.
From the point of view of the Socialist Party and most of the other forces who initiated the CAHWT in the months leading up to the introduction of the Household Tax, this campaign had the potential to unleash the pent-up anger and frustration of the working class.
Unlike previous non-payment campaigns, where participants tended to view the injustice of water or bin charges in isolation, the context of the austerity strategy being pursued by this government and its predecessor was raised by people at all the CAHWT meetings.
Since 2008 we have been told that by accepting each round of cuts and impositions at budget time the conditions for economic growth were being prepared.
This is still the message from the government and it is wearing thin particularly given that Ireland is in its sixth consecutive year of economic decline as a result of the banking and construction collapse and the austerity policy response since then.
The government’s relative quietness on the issue since the 31 March deadline passed can be attributed entirely to their desire to get the Fiscal Compact referendum passed on 31 May.
They are fearful of antagonising people at this immediate juncture by following up on their threat of court action and fines for the hundreds of thousands who have not paid their household tax.
However CAHWT is under no illusions that, notwithstanding the government’s current posture, we have to prepare for big battles post-referendum whatever the outcome, though the government will be more assertive if it achieves a yes vote.
CAHWT had a national conference recently. Scores of motions came in from suburban, city, town and village based campaigns from Wexford to Donegal. The battles in the months ahead will likely be the main focus.
Specifically, preparations will have to be made to respond to the intimidation from the local authorities who have indicated that they will initially try to shake out more money by issuing intimidating letters before resorting to court actions, where fines of between €1,000 and €2,500 have been provided for by the legislation.
The campaign has pledged that nobody will go to court alone. The initial cases will be vigorously defended by campaign solicitors and barristers and every effort made to pick apart the legislation and find whatever loopholes can be found to frustrate the government.
Thereafter, once the key lines of argument have been established, the campaign will strive to ensure that the best defence possible is provided for people. More important however is that each court case is accompanied by mass protests.
The government hopes that the court cases will panic hundreds of thousands into payment. The intention of the campaign is to demonstrate that the courts cannot break non-payment.
A second front in the struggle will open up in the housing estates in the autumn as a mass programme of water meter installation begins to lay the basis for a water tax. This too will have to be resisted.
The government by the end of the year will also have to publish legislation detailing their valuation methodology for the full property tax which will replace the household tax which is an interim measure.
The contention of the campaign is that the combination of property and water taxes would by 2014 approach €1,000 a year for an average household. We have been able to cite recommendations by government economic advisors to back this up. However the government by showing its hand on this issue will, alongside water meter installation and the dragging of ordinary workers, pensioners and unemployed people to court, set the scene for a massive escalation in the struggle.