The Irish bailout and the necessity for the United Socialist States of Europe

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The Irish bailout and the necessity for the United Socialist States of Europe
24 November 2010

The bailout of Ireland by the European Union and the International Monetary Fund
makes clear that society confronts a disaster if the international banks are
allowed to continue their plundering of national treasuries and dismantling of
social welfare systems built up over decades.

The financial rescue package has exposed the role of every European institution
and national government as the servant of a global financial aristocracy. Not a
single government, nor a single parliamentary party is either willing or able to
check the ever-expanding power of international finance capital.

In May of this year, following a concerted campaign by major banks and rating
agencies to downgrade Greek debt and drive up the price of Greek government
bonds, the EU and the IMF intervened to arrange a €110 billion bailout of the
country. Tax payers were assured by European politicians and the media that
Greece was a unique case and there would be no similar bailout of another country.

Now, barely six months later, a comparable sum, ultimately to be repaid by the
tax payers, has been allocated by the EU and IMF following another destructive
campaign by international bankers and speculators to downgrade Ireland.

Having secured hundreds of billions from national governments to cover their bad
gambling debts, the financial plutocrats are now dictating the terms of the most
punitive austerity programs to be imposed in the history of post-war Europe. The
details of the Irish budget are to be announced today, but the cuts to jobs,
living standards and welfare rights dictated to the government by the banks will
be unprecedented. One European Commission source described the austerity
measures being drawn up for Ireland as the “Oliver Cromwell package,” a
reference to the English lord protector whose army ravaged Ireland in a brutal
campaign of re-conquest in 1649.

The financial elite take no hostages and are not prepared to accept even the
most meager measures aimed at reining in their profits. Top bankers reacted with
fury when the German government, backed by France, made the timid proposal a few
weeks ago that the banks and major creditors shoulder some of the costs of a
future bailout. The chairman of Deutsche Bank denounced the German plan and
undertook a European-wide tour of board rooms and political institutions aimed
at torpedoing the proposal.

The German government beat a hasty retreat and declared that any requirement for
payments by the banks would be put off until 2013 at the earliest. There are no
provisions in this week’s bailout of Ireland for the banks or big bondholders to
suffer any losses.

With their latest international offensive, the banks have upped the ante. Not
content with retrospective bailouts, they are demanding that governments set
aside huge new funds to underwrite a new round of financial speculation.

Commenting on this process, the Frankfurter Allgemeine Sonntagszeitung noted:
“The financial crisis has come round to where it all started: the banks. And
they have grown cheekier. While Lehman had to go bust to prove the need for tax
payers to bail out banks, potential crises are now to be ‘preempted’ by EU
taxpayers. Thus the banks will not be held liable for the risk—to cover which
they charge abundant interest—that a calamity will occur and a major debtor will
default.”

Having ravaged the economies of Greece and Ireland, the financial mafia is
moving on to new pastures. With the ink barely dry on the Ireland deal, the
markets have stepped up pressure on the bonds of their next likely
victims—Portugal and Spain.

Governments across Europe have reacted by spreading the poison of nationalism in
order to deflect from their own complicity and divert attention from the
calamitous social consequences of their austerity measures. They seek thereby to
prevent a unified international response by the working class. In a series of
European countries, ultra right-wing, racist and anti-Islamic organizations have
been brought into government to stoke up national chauvinism.

In Ireland, the Fianna Fail government led by Brian Cowen has faced
denunciations from parties across the political spectrum deploring its “sellout
of Irish national sovereignty.” These very same parties have made clear their
full support for the bank-dictated austerity measures.

The class interests underlying the official invocation of national sovereignty
is exemplified by the focus of the government and opposition alike on preserving
Ireland’s 12.5 percent corporation tax—a policy dictated by the interests of
capital and insisted upon by US corporations in particular. It is clear that the
Irish government, with the backing of the nominal opposition, secured from the
EU and the IMF a continuation of the low corporation tax by offering to impose
even more brutal attacks on the working class.

Ultimately, the opposition parties are animated by a belief that, being
once-removed from the crimes of Fianna Fail and the Greens, they are better
placed to impose the social cuts being demanded.

The leading role in this orgy of chauvinism is played by the trade unions and
their apologists in the middle-class pseudo-left organizations, which at every
point in the crisis have sought to defuse and divide massive popular opposition
to the cuts and facilitate alternative strategies for implementing the program
of the banks. The German, French and British trade unions have not lifted a
finger to support fellow workers in Greece and Ireland, while the Irish trade
unions took the unprecedented step of agreeing a four-year ban on strikes, a pay
freeze and thousands of job cuts in order to stabilize Irish capitalism.

Working people must decisively reject the nationalism and chauvinism being
whipped up by bourgeois governments to shield the financial elite. Workers and
youth across Europe and internationally have demonstrated their willingness to
fight, but these struggles can be successful only on the basis of a break with
Europe’s social democratic parties, the trade unions and their fake-left allies.
The conflict is not between the Irish, the Greeks, the Germans, the French and
the British, nor between the Europeans and the Americans, but between the
international working class on the one hand and finance capital and its
political lackeys on the other.

The only alternative to a future of poverty, dictatorship and war is the
unification of the European working class on the basis of a revolutionary
socialist program, including the confiscation of speculative profits, a radical
revamping of tax systems to increase the burden on the rich and provide relief
for working people, the repudiation of national debts, and the expropriation of
the banks and major corporations and their transformation into publicly owned
enterprises under the democratic control of the working class.

The progressive unification of Europe is possible only in the form of the United
Socialist States of Europe. The International Committee of the Fourth
International (ICFI) is the only political organization worldwide which advances
such a perspective. We call on working and young people to read and support the
World Socialist Web Site, study the policies and programs of the sections of the
ICFI, and join and build the world party of socialist revolution.

Stefan Steinberg

http://wsws.org/articles/2010/nov2010/pers-n24.shtml

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