After weeks of dancing the seven veils,
trying to hide what they were up to, the government, the EU and the IMF
announced on prime time television today (Sunday)that they have signed up to an €85 billion bailout. The money which has 5.8% interest rate attached to it will go to recapitalise the banks( €10bn); fund the budget (€50bn) and deal with “banking contingencies” (€25bn). So in other words the whole lot is going to bail out the banks and keep the government finances going.
After weeks of dancing the seven veils,
trying to hide what they were up to, the government, the EU and the IMF
announced on prime time television today (Sunday)that they have signed up to an €85 billion bailout. The money which has 5.8% interest rate attached to it will go to recapitalise the banks( €10bn); fund the budget (€50bn) and deal with “banking contingencies” (€25bn). So in other words the whole lot is going to bail out the banks and keep the government finances going.
€85 billion is about €17,000 for
every man, woman and child in the state. The fact that Cowen and Lenihan
won’t be around to clean up the mess they’ve made is one thing, but to
leave a bill of this scale is another thing all together. But to make
things worse, the government will rub salt in the wounds of the working
class by raiding the pension pot to help pay for the deal.
This amounts to selling the family silver or basically asset stripping the state to the tune of about €10bn.
Inevitably this will be followed up by further attacks on worker’s
pensions. This in and of itself will generate huge opposition. So if the
government sought to gain anything politically from this deal, then the
truth is they could well be whistling in the wind. The political damage
has been wrought and the scale of the demonstration yesterday in
Dublin’s wintery weather yesterday illustrates that the working class
won’t stand for too much. The Budget will probably scrape through on
December 7th, but there will be a general election in the New Year and the coalition will be thrown out.
While the bailout may take the heat off Ireland in
the bond markets for a period, the problems in the Irish economy means
that the bosses will still attempt to place the burden on the backs of
the working class. On a European scale the crisis means that the
speculators will merely look for another victim, as the logic of the
speculators means that there will always be a country which is closest
to the edge, and risk means profits.
The limits of European integration have been
demonstrated clearly during this crisis, as the contradictions between
the different economies in the euro zone have become more acute. While
on a world level capitalism is in an impasse, from which it cannot
escape. The only solution in the long run is the abolition of capitalism
in Ireland and on a European and World wide scale.
