Socialist View (Spring 2003)
Cut Backs and Privatisation: The Irish Government's New Offensive
by Kevin McLoughlin
As the Irish economy continues to decline and heads into recession, the
Fianna Fáil and PD government have launched their new neo-liberal
"The share of capital relative to the share of labour has risen. The division
of social wealth between capital and labour has become still more unequal....
The material position of the worker has improved, but at a cost of his
social position. The social gulf that divides him from the capitalist
has widened." Karl Marx
This quote from Marx is a good summation of the economic boom in the
South and what it meant for working class people. Not only is Marx long
gone, so to now is the "Celtic Tiger". In 2000, Gross National
Product grew by 8.7%, the estimate for 2002 is just 1.2%!
Such a dramatic downturn in the economy is bound to have a profound
effect on all aspects of Irish society. Working class people are concerned
about the economy and what changes are on the horizon.
The sharpest expression of these changes has been seen already in the
steep decline in the government's finances. As a result of this decline,
Fianna Fáil and the PDs have launched into a series of attacks
on the working class through cutbacks and their proposals for widespread
privatisation in the public sector. The government have embarked on
a generalised, neo-liberal offensive, and the tempo for the implementation
of these changes has sped up since the budget.
Ahern and his government exude an air of confidence. They are taking
comfort from the fact that the official opposition are ineffectual and
in a shambles. The government also believes that they have the measure
of other opposition forces, i.e. the trade unions, who despite the government's
neo-liberal offensive are signing up to a new social partnership agreement.
The government are moving swiftly to implement these attacks in order
to take advantage of the weak opposition and they hope that they can
recover from any political fall out in time to fight the next election
with the backdrop of a recovering economy. However, Bertie Ahern and
Mary Harney have no real understanding of the depth of the anger and
disgust that is bubbling under the surface of Irish society.
The government is scrabbling to make cuts and implement privatisation
and wage restraint in an attempt to seriously curtail public expenditure.
The list of proposed cuts, price hikes and new charges seems endless.
However their offensive is not only on the economic front, they are
also moving to restrict democratic and political rights in a number
of very important areas and enhance the autocratic powers of the state.
Harney has proposed new restrictions on immigration. Her claim that
restricting work permits will defend Irish jobs is laughable. The ruling
from the Supreme Court denying immigrant or refugee families who have
an Irish born child the automatic right of residency, is a significant
weapon that the establishment will use in the future. In the context
of an economic crisis, the establishment parties will use a divide and
rule tactic to scapegoat immigrants for rising unemployment and public
Within months, new draconian legislation for local authorities and service
charges will be enacted. This legislation allows for councils to refuse
to collect the bins of people who don't pay the bin tax. This is a very
serious attack on the anti-service charges campaigns and must be met
with a concerted campaign of opposition. This legislation will also
take the power to decide local charges (taxes) and local authorities'
waste management strategy out of the hands of the elected councillors.
From now on, bin tax charges will be set by unelected local authority
managers. They will also have the right to decide to build waste incinerators,
and the location of dumps without consulting the councils. Many establishment
politicians will cry foul over these changes, but privately they will
be delighted, hoping that they will no longer be blamed for the rising
cost of these local charges.
In February, the Garda Special Forces were deployed on the streets of
Limerick and the army was sent into Shannon Airport. These two events
have occurred without any serious opposition or much discussion about
the implications of such actions. The feud between rival gangs in Limerick
and the so-called "dangers" posed by the incidents at Shannon
Airport were blown out of proportion by the media and the government
and facilitated these unprecedented measures. The Irish Army is now
in effect protecting the transfer of US troops to the Gulf for the war
against Iraq! While it is very unlikely that the state will try to repress
the anti war movement at this stage, these developments are part of
a trend by the state over the last couple of years to take a more repressive
approach to workers and political activists. A potentially dangerous
precedent has been established. They have been able to put armed Gardai
on to the streets of Limerick even though there was considerable controversy
about the killing of John Carthy by these same special forces at Abbeylara.
They are also moving to impose new restrictions on the Freedom of Information
These neo-liberal attacks, the weakening of democracy at local authority
level, and the use of the armed forces of the state are not in fact
indications that this is a strong government confidently moving forward.
The reality is the opposite. This government has less actual support
and authority in society than any previous government in the history
of the Irish state. At this stage, they are able to get away with these
measures and legal changes because of the generally low levels of political
activism and struggle and the lack of a strong political alternative
which represents working class people. However, the change in the economic
situation and in a more immediate sense the war on Iraq, will create
the conditions in which there will be an increase in struggle which
will be a real challenge to the Irish capitalist establishment.
The Irish economy is in a very weak position. Gross Domestic Product,
the value of all goods and services produced in Ireland grew by 5% -
6% in 2002. However, the Gross National Product (GNP) figure of1.2%
growth is more accurate because it takes into account money transferred
into and out of the country. Given that the multinational corporations
repatriate a huge amount of profits, this is a truer picture of the
wealth in the country. The latest figures from the Central Statistics
Office show that GNP for the third quarter of last year actually declined
compared to the same quarter in 2001. If that trend continues it would
mean that the domestically owned economy had slipped into recession,
which would be a dramatic change after years of substantial growth.
At this stage this would mainly indicate the decline in the key markets
to which Irish companies export. It would also reflect the increasing
cost of Irish exports due to the increase in the value of the euro.
More so than before, consumer spending and the continuing growth in
credit for mortgages, are playing an important role in the economy.
However, both of these would be cut across quickly if there was a sustained
loss in jobs. The number of job losses has grown in the last year. If
the economy remained sluggish this year and certainly if the domestic
economy went into recession, job losses would be likely to increase
rapidly and would further increase the economy's problems.
The perspectives for a new social partnership deal must be set against
this background. Even if a new deal were agreed, a deterioration in
the economy would put it under considerable pressure. A 7% pay rise
over 18 months in the private sector is below inflation and will only
be accepted by the majority of workers reluctantly. It is now likely
that many employers will cite inability to pay because of the changes
in the economy. In addition, the deal contains binding arbitration in
order to attempt to curtail the ability of workers to force employers
to pay up.
The state may find it harder to renege on its 7% pay award and the benchmarking
awards. Still, with a recession on the offing, government finances will
be hit hard. Major new changes are proposed in the public sector and
the government will use them to cut public sector expenditure at every
turn. In the new economic situation, social partnership will not be
able to stop industrial struggles occurring in the defence of jobs,
wages and working conditions.
Vacuum on the left
Political parties are now focused on the local elections due in the
summer of 2004. Most of them are assuming that there will not be a general
election before then. However, there are many banana skins that this
government can slip on. In particular, given the anger that has built
up over the years during the "Celtic Tiger", a series of struggles
by workers could fundamentally undermine this government, who have a
weak base of support and an early election could be forced upon them.
Sinn Féin, the Greens and now Labour under the leadership of
Pat Rabbitte are trying to position themselves to make gains in the
local elections. Although they will increase their number of councillors,
there is an ever growing vacuum in which genuine left forces can develop,
in particular the Socialist Party.
It will be a feature of the new political and economic situation that
Sinn Fein, the Greens and Labour will actually find it increasingly
difficult to respond to and reflect the demands of the class struggle
as its tempo increases. These parties are fundamentally rooted to the
idea of the capitalist market and they lust for power. Coalition and
ministerial jobs will influence their political direction far more than
the needs of the working class.
While it is not yet a generalised mood in society, it is instructive
that many activists involved in the anti-bin charges campaign are quite
disgusted with Sinn Féin. These activists clearly see that Sinn
Féin talks about radical opposition to the bin tax, but that on
the ground they haven't been prepared to build the anti bin tax campaign.
Sinn Féin have an important base in some working class areas
but they will be incapable of leading the new struggles of the working
class when they arise in the coming period.
The decline in the conditions for the economy will result in the creation
of the political and social conditions within which the idea of building
a new mass party to represent working class people will mature. That
will represent a very important development in the workers' movement
and the Socialist Party will be a key player in the processes leading
to the development of this party. In the weeks and months ahead there
will be big opportunities to build the genuine forces of socialism in
the South of Ireland.
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or for the articles on the USA-Iraq war go to the sitemap.
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