Tag Archive for Ireland

CPI encourages active engagement in the right2change initiative

By Eugene McCarten

Taken from this months Socialist Voice at http://www.communistpartyofireland.ie/sv/02-right2change.html

The trade unions that, together with the communities resisting the imposing of water charges, have been the mainstay of the Right2Water campaign have taken a bold initiative in launching the Right2Change consultative process.
They are sponsoring what will be a whole series of public forums around the 26 Counties. The first series of meetings took place in late September, with more being planned for October and November.
These forums will provide an opportunity for the trade unions and the communities to come together, to share experience and learn from each other. The unions have developed a policy platform on which they wish to engage the communities in the period coming up to the general election. They have developed policy positions on a number of important areas, including the following:
• Right2Water
• Right2Democratic Reform
• Right2Jobs and Decent Work
• Right2Health
• Right2Housing
• Right2Education
• Right2Debt Justice
• Right2Equality
• Right2National Resources
• Right2Sustainable Environment
In their statement they outline a series of political principles that should underpin a future progressive government. These were first presented in draft form to a May Day conference organised by the Right2Water unions, which was followed by a consultation process that culminated in a conference in June that amended and adopted those principles. The document emerging from that process addresses a range of areas, including housing, health, education, and water.
The Right2Change campaign is seeking to win public and political support for what its spokesperson, Brendan Ogle, termed “a fundamental change in the way we view our economy and our society.
“These policy principles are merely a starting point,” he said. “That is why, in the coming weeks, we will be organising meetings throughout the country to continue the process of consultation started on May Day.”
The unions have published a fiscal framework that could allow a progressive government to increase spending by more than €9 billion over the next four years, allowing a future government to tackle some of the biggest crises in the state.
Right2Water and Right2Change are encouraging everybody to come along to these meetings as we all endeavour to make Ireland a better, fairer country. Everyone concerned about the future of our country should actively engage with these forums.
The CPI will be attending, presenting its ideas and demands in relation to the debt, membership of the EU, and the euro, as well as arguing for a much more radical transformative strategy, one that is aimed at weakening and breaking the power of capital and strengthening the power and capacity of the working class to defend and advance its own economic and political goals.
This is a battle for a new way forward, to lay before the people the central challenges they face and the fact that there is no simple or easy way forward, that they should not allow their anger and their independent demands to be drawn into mere electoralism, buried in parliamentary procedures and rules.

NERI ‘Manifesto for growth’

NERI’s Quarterly Economic Observer Autumn 2015 was described at its launch as a manifesto for growth.

The economic think tank decided this year rather than doing a pre-budget submission, of which it has detailed proposals out on already, it would focus medium to longer term growth strategies and policy areas for Governments to pursue.

Section 4 discusses policies for long-run economic growth in the Republic of Ireland:

The economy’s potential to grow depends on its ability to generate productivity gains year-on-year. The Republic’s productivity growth has been falling since the 1980s.

The best way to sustain growth in productivity over the long-term is to invest in education and skills, in productivity enhancing infrastructure, and in the production and diffusion of new technologies.

We propose a set of policies designed to increase the economy’s future potential output. For example, we propose the establishment of an infrastructure bank, increased funding for research and development and early years learning, increased support to prevent child poverty, and a phasing out of most though not all government subsidies and tax breaks.

Growth in per capita output also depends on growth in employment and the number of hours worked across the economy. We propose a number of reforms to reduce barriers to labour market entry. Examples include subsidies for childcare and the gradual tapering of family supports along with income.

Budgetary projections suggest the primary government expenditure share of economic output will, by the end of the decade, be at a very low level by NERI modern historical standards. While acknowledging the need for reform of the tax system, we urge the government to reconsider its plans to cut the overall level of taxes in Budget 2016 and to take a more strategic and long-term approach to growing the economy.

The document also provides a very useful policy reforms that will increase productivity and output. This is on page 9 and 51 of the document.

EU blocks an Irish vote on ‘Basic Principles for Sovereign Debt Restructurings’

Luke Ming Flanagan

By Luke Ming Flanagan MEP

IRELAND AGAIN PUTTING ON THE ‘RICH MOUTH’

In the early 1940s, during another Emergency, it was that great Irish Times columnist Myles na gCopaleen (Brian O’Nolan) who gave us ‘An Béal Bocht’, the Poor Mouth – pretending you’re much worse off than you actually are.

Earlier this year, in the throes of another Emergency, another great Irish Times columnist, Fintan O’Toole, has given us its 21st century equivalent, ‘An Béal Saibhreas’, the Rich Mouth, a practice first indulged in by this current government when they blandly (and blindly) proclaimed to the world that Ireland is doing fine, thank you very much, we don’t need or want any debt relief.

Last week, in no less a forum than the United Nations General Assembly, official Ireland was again putting on ‘An Béal Saibhreas’, the Rich Mouth.

I sent the following e-mail on Wednesday last to Declan Gallaher, the Irish Permanent Representative to the EU here in Brussels (essentially our Ambassador), who had asked to meet me:

Dear Declan,

Unfortunately I can’t meet you this week, hectic schedule. I do however have a request.

Tomorrow, Thursday September 10th, the UN General Assembly will be presented with a set of proposals titled ‘Basic Principles for Sovereign Debt Restructurings’, which have already been adopted in Committee. This is a very important step along the road to establishing an international legal framework that will allow troubled countries to emerge from their indebtedness in a fair, structured and controlled manner, and remove the ability of vulture funds to undermine deals done with the majority of creditors.

Last year, and shamefully in my view, Ireland voted against such a move; I’m asking now that Ireland support these proposals that will be presented tomorrow and further, that in November, when a new ‘Modalities Resolution’ is proposed that will eventually lead to the multilateral legal framework for Sovereign Debt Restructuring, Ireland would again support the initiative.

Regards,

Luke Ming Flanagan MEP

Next day I received the following reply:

Dear Honourable Member,

Following the discussion of this issue at Coreper yesterday the EU has adopted a common position in relation to the proposal concerning ‘Basic Principles for Sovereign Debt Restructurings’. The agreed EU common position is to not vote in favour of this proposal. Ireland will be among a large number of EU Member States abstaining from the vote later today in New York. No EU Member State will be voting in favour of the resolution.

Ireland will continue to engage on this matter with our EU colleagues and with the G77 countries.

With best regards,

Declan

Permanent Representative

THE BACKGROUND TO THIS PROPOSAL

If you get into financial difficulty at either a personal or a business level there is a way out, either through personal bankruptcy or business bankruptcy. At the sovereign level however, and as those of trapped in the eurozone have learned to our cost in the last few years, for insolvent or near-insolvent nations, no such facility currently exists. That needs to be corrected, and that’s what this proposal was all about.

Currently, if a sovereign country gets into severe debt difficulty and needs relief, this can be done only with the voluntary agreement of the creditors. Unlike personal or business bankruptcy, there are no courts to assess the debts and the difficulty of repayment, to make fair and binding decisions on ‘haircuts’ for the creditors, and to then enforce those decisions. This would spread the pain across creditors and debtor, would then enable the distressed sovereign to get back on its feet, a fresh start.

In the absence of such a facility we witness a developed European country, Greece, forced to its knees by a Troika that then feigns concern for the citizens subsequently brutalised; we see another advanced economy, Argentina, forced by an American court into a situation last year of involuntary redundancy, because a vulture fund purchased some of the holdout creditor debt from Argentina’s genuine default of 2001, then swooped to demand full payment, though they themselves had paid merely cents on the dollar for that debt.

PRESSING NEED FOR AN INTERNATIONAL COURT

The major problem at the moment is that whether in a ‘controlled’ default, as in Greece, or a unilateral default, as in Argentina, the ordinary people are going to suffer immensely. With the creditors calling the shots, demanding payment no matter the social cost, the people are forced to carry a massive and disproportionate burden.

Were this proposal in the United Nations to be carried through, however, this burden – while still being painful – would be considerably lessened.

It was designed by what’s known in the UN as the G-77 group of countries, originally 77 developing nations that came together back in 1964 but now with 134 countries. Traditionally, those sovereigns most vulnerable to insolvency came from that group – no more. Ireland recently found itself in that position and there is no guarantee it won’t happen again.

Even the much-criticised IMF, those with the most experience in sovereign debt ‘restructuring’, accept that there is a problem here but all their efforts to set up any such international court for sovereign insolvency settlement has been stymied by the very powerful creditor nations, nations such as the United Kingdom, the United States, Germany and so on. If they wouldn’t allow the IMF set up such a court, rest assured they will resist any efforts to so do by the United Nations, which would have even stronger willing standing.

Ireland though should be fully behind this proposal, not because of selfish self-interest, but simply because it’s the right thing to do.

Instead, and as evidenced by Declan Kelleher’s mail above, we have chosen to hide behind the tainted skirts of the EU.

As outlined above, the countries who DON’T want to see this proposal go through are those with the greatest vested interest in seeing troubled sovereign nations under the heel, to be exploited in every way possible.

These are the countries with whom Ireland has now aligned itself. As with Enda Kenny, Joan Burton and the rest who aligned themselves similarly against Greece in the recent crisis, it’s yet another example of this government playing ‘The Rich Mouth’.

Yet again, this government has sold us out.

Luke Ming Flanagan MEP

A new IMF working paper is brutally stark

A new paper published by the International Monetary Fund states that the banking crises in Iceland and Ireland are among the ten costliest in regard to the increase in public debt, increased in both countries by more than 70 per cent of GDP within four years.

With regard to loss of output, the continuing crises in Ireland and Latvia are among the ten costliest banking crises since the 1970s, with losses exceeding 100 per cent in both cases. “Ireland’s crisis, which started in 2008, is still the costliest since the Great Depression in terms of the economic havoc it wreaked on the country.”

This state is now in a double-dip recession, our GDP having collapsed by 10 per cent, with a debt-GDP ratio next year of 121 per cent, with a deficit of nearly 9 per cent, with unemployment at a record 15 per cent, in the middle of an IMF bail-out programme, and whose banking collapse is costing 40 per cent of GDP.      Our GDP in 2011 was €156 billion, our more representative GNP was €124 billion.      The Irish Bank Resolution Corporation—the bank formed after the merger of Seán Fitzpatrick’s Anglo-Irish and Michael Fingleton’s Irish Nationwide Building Society—has received €34 billion of a bail-out, representing more than 20 per cent of our GDP.

But don’t worry, Enda and the boys and girls at the recent summit in Brussels (29 June) agreed to allow bail-out funds to recapitalise banks directly, and to buy bonds for “well-behaving” countries—states that are pursuing reforms but suffering from market pressure—and the Euro Group “will examine the situation of the Irish financial sector with a view to further improving the sustainability of the well-performing adjustment programme.”

The Irish Timesdutifully reported that Kenny has said that “a European Union agreement reached in Brussels in the early hours of this morning to bring down borrowing costs for indebted countries will reduce the debt burden on Ireland’s taxpayers.”

The announcement came too late to stop one particular piece of lunacy. On the Tuesday, Wednesday and Thursday of the very week of the Brussels summit the state paid private banking debts to the tune of approximately €1,141,716,762—debts not covered by the 2008 banking guarantee and not secured on bank assets.

The minister for finance, Michael Noonan, acknowledged last year that these payments are likely to be to “speculative investors.” Confirming some time ago that the payments would be made, the minister expressed helplessness and ignorance. In answer to a question in the Dáil, he gave this weak justification:

“The Government is committed to delivering a return to a successful, vibrant economy. In this context I have indicated that there is no private-sector involvement for senior bank paper or Irish sovereign debt without the agreement of our external partners. This commitment has been agreed with our external partners and is now the basis on which Ireland’s future financing strategy is built. This strategy is working well, as evidenced by the reduction in pricing of Irish sovereign debt in the secondary markets and the recent successful bond exchange offer by the NTMA.”

So this act of criminal folly would be an example of an action by the sort of “well-behaving” country praised by the president of the EU Council, Herman van Rompuy, after the meeting.

And the next steps?

A banking union “should evolve as soon as possible”

It is reported that EU officials have drawn up a far-reaching plan that would eventually turn the euro zone into an outright fiscal union. The document suggests that ultimately the single-currency area will need a treasury office and a central budget.

Among the short-term changes required is the de facto handing over of budget power and economic policies to the EU level. “Upper limits on the annual budget and on government debt levels . . . could be agreed in common,” says the paper. Budgets that breach fiscal rules would have to be altered. The supervision of all banks would be at the European level, and the EU authority would have “pre-emptive intervention powers.”

The paper—drawn up by the presidents of the European Commission, European Council, Euro Group, and European Central Bank—moots giving the European Central Bank the ultimate authority. In the medium term, so long as there is a “robust framework for budgetary discipline and competitiveness,” some form of debt mutualisation “could be explored.”

Meanwhile, labour policies and tax polices—until now a no-go area for the European Commission—will no longer be exempt. An integrated economic euro zone would need “co-ordination and convergence in different domains of policy,” says the paper, explicitly mentioning “labour mobility” and “tax co-ordination.”

“Let me tell you here,” said the president of the EU Commission, José Manuel Barroso, at the European Policy Centre in Brussels on 26 June, “that fiscal union is about much more than just euro bonds. It also means more co-ordination in taxation policy and a much stronger European approach to budgetary matters.”

And Kenny? According to his devoted fans in the Irish Times, his “focus is on the prospect of a banking union being created over the next twelve months rather than a fiscal or political union over the medium to longer term and he is emphatic that another referendum is not going to happen in the near future. From our point of view the banking union is the big one here.”

In effect, an EU banking union would deprive states of the ability to make banking and credit creation serve national developmental goals. It would make it impossible for the state to insist that Irish banks should subscribe to its state debt. Having given up the power to issue money by joining the euro zone, advocates of a banking union would pass control of credit in Ireland to banks outside the country completely.

Kenny insists that there will be no referendum on such a development. He should have a look at article 45.2 of the Constitution of Ireland, which states that “in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole.”

[COM]

Revealing capitalism in Ireland

This month (July 2012) the Irish Times launched a special web site, www.top1000.ie, that, in its own words, “contains details on all these [top 1,000] companies with the capability to search by industry, company and key employees, and to sort the information by turnover, assets, profit and employees.”

The companies listed cover both North and South and are judged according to their audited accounts from the last three years, covering turnover, profits, and number of employees, making the web site an invaluable resource in analysing the nature of capitalism in Ireland and the interests of the dominant section of the ruling class.

Without meaning to, I’m sure, it serves to show how exposed Ireland is to the instability of monopoly capitalism, and how dependent it is on foreign capital.

In essence, this list makes understandable the actions of the ruling class. They are not stupid, naïve, or weak. Their interests are inherently tied to the interests of the largely foreign monopoly capital that dominates our economy. They are not to be convinced of the error of their ways or the foolishness of their economics, because they are not foolish if you are part of the class that rules.

When they impose pay freezes or pay cuts they are not concerned with how this affects domestic demand: they are doing it to reduce the cost of production and increase the profits of global monopolies. When they ensure that bondholders are fully paid they are not doing this to release capital to small businesses: they are sending a clear message to international capital that in Ireland you will be looked after.

When they refuse to legislate for comprehensive collective bargaining, union recognition or the right to organise a union they are not doing so because the voluntary system has worked well for all sides: they are doing so to facilitate international capital in operating in a non-union environment.

This web site reveals the extent of the dominance of foreign monopolies and consequently the reliance and subservience of the Irish state to these monopolies.

Of the top 50 companies in turnover, 31 are foreign monopolies and 19 could be considered Irish companies. However, a closer examination of these “Irish” companies suggests that their interests are tied more to international operations than to a domestic market, meaning that their interests are aligned with those of their foreign monopoly friends.

Take CRH, for example: the great majority of its 76,000 employees are employed in the other thirty-five countries it operates in, and its profit of €711 million last year is largely based on overseas work. Likewise DCC Group: its 8,868 employees generated a profit of €185 million last year but it boasts on its Irish web site that 68 per cent of its operating profit came from Britain, 18 per cent from the rest of the world, and only 14 per cent from the Republic.

Where are their interests tied—to serving a domestic market and championing a strong independent Ireland? or serving overseas markets and championing a submissive Ireland that doesn’t rock the boat internationally?

Smurfit Kappa, considered an Irish company, employs 38,373 people but only 800 in Ireland. Kerry Group employs more than 24,000 people and made a profit of more than €400 million last year. Again, however, operating in more than twenty-five different countries and with customers in more than 140 countries, Kerry Group’s interests are tied to monopoly capital globally.

Likewise Ryanair: 8,500 employees, mostly overseas. Of United Drug’s operating profits, two-thirds were generated overseas: 41 per cent in Britain and 20 per cent in the United States. Its Irish business contributes a third of the company’s profits. And of its 4,500 employees only 750 are employed in Ireland.

Kingspan, the construction and insulation company, is based in Ireland but has larger overseas operations in other parts of Europe, the Middle East, the United States, and Australia. It has a turnover of €1½ billion, made an operating profit of €77.8 million last year, and employs 5,800 people globally.

Origin employs 1,415 people in its worldwide operations but only 100 of these in Ireland; it made a profit of €62½ million last year. Sisk, which has construction contracts all over the world, made a profit of €9 million last year, employing 1,132 people in Ireland out of a total of 2,000.      Diageo, formed from a merger between Guinness and the British hotel chain Grand Metropolitan, had a turnover of €1.9 billion and employs 1,500 people in Ireland. However, production is for a global market. The company’s global brand teams, based in Ireland, develop sales and marketing strategies to meet the needs of the company’s international markets.

Musgrave, one of Ireland’s most “successful” companies, began as a family shop in Cork in the 1870s. While still controlled by the family it is now a global operation, employing 55,000 people (34,000 in Ireland), with a turnover of €4½ billion, two thousand operations in Britain, and shops in Spain. The co-op IDB employs 4,000 people in Ireland but is driven by export need.

The exceptions to the rule—those Irish companies among the top fifty serving a domestic demand and employing primarily a domestic work force—are Dunne’s Stores (employs 16,000), Boyle Sports (employs 1,100), ESB (employs 1,275), Eircom (employs 7,000), Aer Lingus (employs 3,500), BWG (employs 900), and Tedcastle (employs 400).

So, of the nineteen Irish companies in the top fifty in terms of turnover, only six could be said to be interested in an Ireland with consuming, well-paid workers; the rest are more concerned with cheapening their production costs in Ireland or employing workers elsewhere. [NL]