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 (28 November) 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.
Source: Fightback (Ireland)