Workers Solidarity Movement

Recently an American friend was over buying tatty gifts for the folks back home. She asked me how did the Leprechaun look come about.  Who decided that they were all going to be short arsed red haired people?  It was a good question.  "Does anyone look like that anyway?" she said. Immediately our present prime minister sprang to mind.  

Okay – Enda Kenny does not have a little pipe and a smig of a ginger beard – but he does do that winking and telling you tall tales.  One of his more recent ones was to say that he managed to renegotiate the interest rate on the staggering loan that we’ve managed to pull down from EU/ECB/IMF.  The rate was reduced from 5.8% to around 4%, and the little man was jumping a jig in front of the cameras about it.  What he neglected to tell you was the reason for this.  Two words sum up that reason; Greek default.

The Greeks were going to default on the terms of the bail-out loan that they received last year (May 2010) of €110 billion from the troika of EU-ECB-IMF. The government of George Papandreou made drastic cuts that were demanded across the board in public spending when they received this loan, but guess what? The economy remained in freefall. So with default looming on the horizon like a caribou in front of a speeding truck, there was a new plan hatched. Give the Greeks another loan, this time of €120 billion, the bondholders let it roll on, keep on making the austerity cuts, keep the privatisiation program going, get some rich Greeks to adopt the novel idea of paying some taxes, and make the rescheduled repayment dates in mid 2012.  This plan was hatched because that is how you have a structured default, you call it a ‘voluntary roll-over’ and the people who loaned you the money loan you some more.  This is far better than a disorderly default I presume. *

In the midst of all that – to try and alleviate the prospect of longer and more continued pain for the Greeks the interest rate was cut on the loan book. The vultures thought they were getting none of their money back, now they drop the rate by a couple of points. This is what counts for sympathy in the markets.

In the middle of all this the interest rate for Ireland on her loan of €85billon fell from 5.8% to something between 3.5 – 4%. (Financial Times July 26^th ‘Irish eyes smiling after shot of EU optimism’By John Mulgrew and Ralph Atkins.)  But our Leprechaun remained steadfast and said that he was going to do better by sorting out the fact that we are spending more than we are taking in.  So we can expect another horror budget in December from him and his Government.

What this story illustrates is that the little man is a true politician.  What he does is take credit for something that is totally outside of his control. Distance yourself from the disasters, take credit for the victories.

He told the little people he would get the interest rate lowered and ‘be-de-hokey’ didn’t he go out there and do battle in Brussels and come home with a new deal. No, we have the default of the Greeks to thank for that, plus the fact that the Euro’s future hangs in the balance as the vultures circle the old world and eye up the next victim economy. Will it be Spain, will it be Italy. Here’s what she said to me: "Que serra serra whatever default will be, the futures not ours to see, que serra serra."

What this Government has done since they took over from the previous Fianna Fail regime is continue with the same mantras.  "We have no money; it was broke when we got here, we are looking for some cost neutral ideas!"  The fragile growth that has come in what is left of our economy is mainly exports lead.  The current slow-down in the US, our biggest export market does not bode well. Yet we see no corrective action.

But more importantly there has been no change in policy. Cuts have not been reversed. We continue on this hard road of austerity which hasn’t gone very well for the Greeks. The new government has done little to protect the poorest and most vulnerable in our society. The numbers emigrating are on the increase to 1980’s levels (CSO Population and Migration Estimates April 2010). The numbers unemployed remain static at around 14.1%.

What have we heard from this government in terms of the bigger picture?  Zip. Nada. Zilch. What we’ve had is the constant distraction of another ‘friend of our land’ coming to visit us, be that the Queen or the President of the USA. We are now in the middle off a presidential race for a figure head that effectively goes out and touts for business to China.  Does it matter if this person is a badly dressed poet or an attention seeking retried chat show host or a bald headed Dragon? No. 

It matters that we have a bankrupt economy. People cannot pay their electricity bills – the charities that help people are inundated with calls for assistance; and what do we have to look forward to this winter? Another austerity budget and a household tax! When do you think the present Government is going to get around to asking the rich to make a contribution to keep our little bankrupt economy going? Ask Enda if you see him. He couldn’t go to the Connaught final because the government had just closed Roscommon hospital. This little man and his government of like little-minds would rather do that than ask the millionaires for an extra cent.

*John Lanchester's article 'Once Greece goes'  (from the London Review of Books) is where the Greek information comes from.