In Place Of Fear

29 Sep 2010

Statement Issued by Jack O'Connor, President of the Irish Congress of Trade Unions on Jobs & Growth

ETUC Day of Action - September 29, 2010

 

"Today all over Europe workers are protesting against austerity policies which are placing the interests of bankers over citizens - destroying jobs and jeopardising economic recovery.

"Here the day marks the resumption of Dail business after a long summer recess. Ironically it also coincides with the 2nd anniversary of the single most catastrophic financial policy decision in the history of the state - the inclusion of Anglo Irish Bank and Irish Nationwide in the Bank Credit Guarantee Scheme. On that day two years ago our policy makers, mesmerised by the men with the Midas touch, issued (perhaps for the best of reasons) a limitless blank cheque to be honoured through the misery of more than one generation of the people who live in Ireland.

"Then they unleashed the most sustained assault on working people and those who depend most on Public Services, in living memory. Savage cutbacks have been inflicted on the most vulnerable in the community accompanied by pay and pension cuts. Simultaneously hundreds of thousands have been condemned to hopelessness as unemployment has been cynically and deliberately allowed to escalate relentlessly, in order to drive down wage costs in the hope of bringing about recovery through export-led growth. (Ironically this is predominantly the same Government which inherited a booming export-led economy in 1997 and went on to ruin it by prioritising speculation over sustainable development).

"Now two miserable years on the evidence of the failure of this cruel strategy is there for all to see. Despite record growth in exports, the economy is still declining, businesses are still closing and people are still losing their jobs. The much sought after miracle of export-led growth has turned out to be a chimera delivering neither jobs, revenue or recovery. It must now be transparently obvious even to the most blinkered adherents of liberal orthodoxy that concentration on 30 percent of the economy to the detriment of the other 70 percent will result only in further misery.

"But what is our Government doing? Committing to more of the same, only worse - declaring the intention to intensify the austerity programme beyond the €3bn they earlier announced for Budget 2011. All this is to appease the perceived sentiment of the financial markets. Seemingly, we must prove our determination to repay the debts incurred through the profligacy of those at the top of our society by crucifying those at the bottom. There might be some rationale to it if it did what it says on the tin - but it clearly does not. The speculators who infest the global money markets are not impressed. They can evaluate the results of our tragic experiment over the last two years as well as we can. They know it isn't working. There is no map to the future only a set of staging posts on the road to perdition. They will continue to extract ever increasing levels of interest on Irish Government Bonds as long as the current cycle of terror continues. Indeed countries such as Spain are receiving more favourable treatment because their strategy is more balanced.

"The assertion that the Irish Government Bond commitments might not be honoured is over hyped. Current debt servicing as a percentage of tax revenue is less than half it was in the 1980s and only one-third as a percentage of GNP or GDP. The entire matter turns on the development of a credible plan for recovery and two years on, our Government has failed abysmally to develop one. The so called fiscal plan is not a plan at all, merely a route to self-destruction.

"Today we care calling for an end to the economics of failure. Along with trade unionists all over Europe we call for real solidarity in the form for a Trans- European plan for recovery, embracing the establishment of a euro bond mechanism combined with a co-ordinated investment strategy for jobs and growth.

"Meanwhile at home we urge our Government to end their doomsday campaign of terror against the people before it becomes a self-fulfilling prophecy. In place of fear we urge them to apply themselves to rolling out a credible plan for recovery. This must offer reassurance to people in terms of their jobs, their pensions and retention of the roof over their heads. Spending is critical to growth and people will not spend as long as they are terrified of what the future may hold. In pursuit of reducing the deficit, we urge the Government to shift focus to revenue sources that will not take out vast sums of money that is currently in circulation in the economy. This can be done through the application of temporary progressive taxation measures on capital and wealth. Most of all we urge them to recognise the necessity of replenishing resources withdrawn in the deficit reduction process through the injection of off balance sheet investment. This is entirely feasible through a combination of measures including:

• The use of a proportion of the National Pension Reserve Fund to provide equity for new enterprises and protecting current ones;
• Creation of a State Holding Company to utilise the assets of our commercial semi-state bodies as a vehicle for investment and leveraging new resources for development and innovation, instead of planning to sell them off at bargain basement prices to be asset-stripped by the corporate vultures;
• Incentivising the investment of savings through the creation of imaginative innovation and State Equity support funds.

"It is not too late for our Government to embrace the lessons of the wasted years - but if they do not do so immediately they should do the next decent thing by calling a General Election and respecting our sovereign right as a people to decide our own fate."