was announced last week that the cost of bailing out AIB has reached
€29.5 billion, which might in fact be €34 billion; and that the total
cost of the bailout could be €46 billion, some 32% of Gross Domestic Product . The implications of this are a recipe for class struggle and massive turbulence within the state.
size of the black hole was within the expectations that had been
created, no doubt by leaks and off the record briefings, over the last
few days. The scale of the problem is incredible, it amounts to €11,000
for every man, woman and child in the state. The government’s plan is
very straightforward. Working people will be forced to pay the bill.
Brian Lenihan is preparing a four year budget plan which will detail
further draconian cuts and tax rises. But the important thing to
consider is that this is the next stage of an austerity programme which
is likely to last for a generation. Irish capitalism has reached an
impasse. This will have enormous political and social implications over
the next few years as the crisis will have an impact on the psychology
of the working class, the middle class and the bourgeois. The effects
of the crisis are reflected in the plummeting support for Brian Cowen
and the FF led coalition.
debt is now four times the size of GDP, this is the background to the
huge instability which has been reflected in the ongoing crisis over
the last two years. The extent of the problem will place more and more
pressures on the public sector. Already there have been a series of
barbed comments and attacks on the Croke Park Deal from the bourgeois
and from the press. The truth is that a four year moratorium on wage
cuts represents an obstacle in the way of the bosses and the FF. The
deal contains a clause that would allow the deal to be revisited next
year. There is no doubt that by that stage the crisis in the state’s
funding and the black hole created by AIB will place enormous stress on
the “Public Service Agreement”. The Public Sector workers will have no
option but to fight back under these conditions.
the announcement of the scale of the problem at AIB has put paid to the
speculation over the actual amount, it does nothing to deal with the
underlying issue. The European Central Bank may have promised not to
“let down” the Irish. But, the logic of finance capital and the
reliance of the state on a bunch of parasitic speculators to raise
funds on the bond markets means that the long term future of the Irish
economy is neither fixed or safe on the basis of capitalism.
reason that the Irish banks were so exposed is clear. The credit boom
during the tiger years fuelled a huge amount of speculation in
development and construction. The banks over extended themselves in
what was essentially a saturated market and when the economic crisis
broke in the United States the whole house of cards came crashing down.
The Irish banks are relatively small by international standards and as
such were at a huge disadvantage when the economic storm broke. The
Irish economy also is hugely reliant on trade and as such suffered
dramatically in the face of the economic tsunami. The effects of the
crash in Britain have had a marked effect economically as the £
Sterling has fallen against the euro, resulting in Irish exports to
Britain rising massively in price. The advantages of the euro zone
during the boom has turned into its opposite as the euro has become a
straitjacket. The problem for the bourgeois in the various European
states is that their economies have fallen out of step and the
contradictions between the different states which had been masked by
the boom have re-emerged. This combined and uneven development is being
expressed in the bond markets and in conflicts between the German and
French bourgeois and the weaker economies, particularly Greece.
Cowen and the Fianna Fáil are in deep trouble. The crisis over the last
two years has been bad enough in itself. The government is hanging on
by a thread in the Dáil. TD’s have challenged the decision to postpone
the by elections again and a court case is pending to force a ballot.
61% of voters in a recent poll want Cowen to go before the election
with only 29% saying he should stay on as Taoiseach. What is
particularly important however is that the Fine Gael are not the main
beneficiaries of the political crisis. They are lagging well behind
Labour which is now on 33% in the polls ahead of FG and FF who are both
stuck on 24%.
The growth in Labour’s support reflects the fact that FG has no credible alternative to the FF/Green Coalition’s programme. But
on the other hand there is a far more important factor at play. The
radicalisation of the working class during the last two years and the
political impasse has resulted in the working class moving in a
political direction which is being expressed through a big growth in
support for Labour, particularly in Dublin. But this growth in support
doesn’t mean that Eamon Gilmore is a great socialist leader or a
reincarnation of James Connolly; far from it. Gilmore has consistently
failed to present a clear socialist programme. The contradiction
between pressure from below and prevarication and weakness at the top
in the trade unions and in the Labour Party also will be reflected in
growing criticism and pressure to move the movement towards the left.
is possible that the Government could fall apart over the next period,
although it is perhaps more likely that the FF will bank on a
leadership “Regime Change” with Brian Lenihan becoming Taoiseach. But
that would only represent window dressing. Lenihan is just as much to
blame as Cowen for the current crisis and the onslaught on the working
class. The most likely outcome of a general election seems to be a
Labour/FG coalition with labour as potentially the biggest party.
needs to build on its standings in the polls, by standing full square
for the interests of the working class. Labour needs a socialist
programme and must challenge the capitalist system itself.
Nationalisation of the banks and big industry on the basis of workers
control and management is the only way to cut across the anarchy of
capitalism and the impasse in Irish Society.