The news came through last night that protesters, led by Sinn Fein deputy Aengus Ó Snodaigh, had broken through the gates of government buildings in the Republic of Ireland. While the economic situation in Ireland may be even worse than that facing Britain, they at least have a parliamentary opposition – albeit a small one – that is willing to place itself at the head of genuine resistance to the situation foisted upon ordinary people.
These relatively small stirrings of anger are long overdue, considering the manner in which the Irish people have been mortgaged for the benefit of international bondholders. Like Northern Rock, the Irish banks made their money by borrowing billions from international lenders, and chanelling it into what turned out to be a series of terrible loans and investments. When the economic crisis struck, it quickly became apparent that the banks would not be able to pay back those who had lent to them – their liabilities now massively exceeded their assets. Had Anglo-Irish Bank been allowed to collapse in September, its bondholders would have been left out of pocket. Such risks are, arguably, part and parcel of lending money – that’s why you get a reward for doing so in the form of interest. Indeed while I agree with Guido Fawkes on virtually nothing, he makes this point well.
What has occurred in Ireland is a particularly shocking example of what the late Teddy Kennedy called “socialism for the rich”. By nationalising the likes of Anglo-Irish, the government have nationalised the losses that would have otherwise accrued to the international investors who lent to it. Paying off these debts is expected to cost the Irish people £50 billion. That’s over £12,000 for every man woman and child in the country. In the present this means truly drastic cuts to public services and to public sector wages in Ireland. In addition to the already quite extreme cuts, the government will be cutting social welfare payments by 10 per cent, cutting the minimum wage by one euro, and cutting a further 28,000 public sector jobs.
In other words, it will be the poorest, the most vulnerable and the most blameless who will be paying off the debts. And unless the government are made to fear the anger of the Irish people as much as they fear the wrath of international finance, things will continue in this vein.