Ireland reveals full horror of banking crisis
Published on 10-01-2010
Source: ABC AU
Taxpayers are being left with the bill and deeper austerity measures, but the government says the banks are too big to fail.
Overnight taxpayers learnt they will be shouldering an even bigger burden to bail out the Anglo Irish Bank - to the tune of $41 billion.
"The banks have actually got us into this mess. They should actually get us out," one person said.
"It is too shocking when you see people still on the side of the road homeless and yet there were these people smoking their big cigars and yachts out in the Mediterranean," another said.
With unemployment at a record high of 14 per cent, Macdara Doyle, from the Irish Congress of Trade Unions, says citizens cannot afford the bailout bill.
"We started out at this place two years ago with what we were told was the cheapest bank guarantee or bank rescue scheme in the world," Mr Doyle said.
"[It] then went to $4 billion. It is now at about $29 billion or $34 billion depending on what scenario you believe. It is not working. It is killing the economy."
Irish finance minister Brian Lenihan says he understands the country's frustration, but says this should draw a line under the taxpayer's liability.
"The Irish people are entitled to be angry with the bankers who lent recklessly over a considerable period of time in the earlier part of this decade," Mr Lenihan said. more
Iceland's politicians forced to flee from angry protesters
Thousands take to the streets of Reykjavik as anger erupts over the impact of the financial crisis
guardian.co.uk, Friday 1 October 2010 20.12 BST
Protesters took to the streets of Reykjavik today, forcing MPs to run away from the people they represent as renewed anger about the impact of the financial crisis erupted in Iceland.
The violent protest came amid growing fury at austerity measures being imposed across Europe. Disruption in more than a dozen countries this week included a national strike in Spain and a cement truck driven into the Irish parliament's gates.
Witnesses said up to 2,000 people caused chaos at the state opening of the Icelandic parliament, with politicians forced to race to the back door of the building because of the large number of protesters at the front. Eggs were said to have hit the prime minister, Jóhanna Sigurðardóttir, other MPs and the wife of the Icelandic president, Ólafur Ragnar Grímsson.
Árni Páll Árnason, the minister of economics affairs, who was caught up in the protests, said: "We have a difficult economic situation and this is something to be expected in a democratic country."
A UN agency has warned of growing social unrest because of a long "labour market recession" that could last until 2015. The International Labour Organisation revised down its forecast and estimated that 22m new jobs were needed to return to levels before the banking crisis. more
Global unemployment to trigger further social unrest, UN agency forecasts
International Labour Organisation (ILO) notes that social unrest has already been reported in at least 25 countries
guardian.co.uk, Friday 1 October 2010 09.08 BST
The International Labour Organisation (ILO) has warned of growing social unrest because it fears global employment will not now recover until 2015.
This is two years later than its earlier estimate that the labour market would rebound to pre-crisis levels by 2013. About 22 million new jobs are needed – 14 million in rich countries and 8 million in developing nations.
The United Nations work agency today warned of a long "labour market recession" and noted that social unrest related to the crisis had already been reported in at least 25 countries, including some recovering emerging economies.
Crisis-hit Spain faced its first general strike in eight years this week as unions protested against the government's austerity measures and labour reforms. The strike on Wednesday coincided with protests in Greece, Portugal, Ireland, Slovenia and Lithuania, as well asdemonstrations in Brussels by tens of thousands of workers from across Europe as part of a European day of action against public spending cuts.
"Fairness must be the compass guiding us out of the crisis," said ILO director general Juan Somavia. "People can understand and accept difficult choices, if they perceive that all share in the burden of pain. Governments should not have to choose between the demands of financial markets and the needs of their citizens. Financial and social stability must come together. Otherwise, not only the global economy but also social cohesion will be at risk." more
The banksters understand what's at stake--even though the rest of us only just seem to be catching on. Here is USA, the destruction of organized labor is so total that it is likely we will be the last to understand that the banksters are intentionally trying to destroy the remaining vestiges of a middle class.
The Neoliberal Experiment and Europe's anti-Austerity Strikes: Governments must Lower Wages or Suffer Financial Blackmail
by Michael Hudson
Global Research, September 30, 2010
While Labor Unions celebrate Anti-Austerity Day in Europe, the European Neoliberals raise the ante:
Most of the press has described Wednesday's European-wide labor demonstrations and strikes across in terms of the familiar exercise by transport workers irritating travelers with work slowdowns, and large throngs letting off steam by setting fires. But the story goes much deeper than merely a reaction against unemployment and economic recession conditions. At issue are proposals to drastically change the laws and structures of how European society will function for the next generation. If the anti-labor forces succeed, they will break up Europe, destroy the internal market, and render that continent a backwater. This is how serious the financial coup d'etat has become. And it is going to get much worse - quickly. As John Monks, head of the European Trade Union Confederation, put it: "This is the start of the fight, not the end."
Spain has received most of the attention, thanks to its ten-million strong turnout (reportedly half the entire labor force). Holding its first general strike since 2002, Spanish labor protested against its socialist government using the bank crisis (stemming from bad real estate loans and negative mortgage equity, not high labor costs) as an opportunity to change the laws to enable companies and government bodies to fire workers at will, and to scale back their pensions and public social spending in order to pay the banks more. Portugal is doing the same, and it looks like Ireland will follow suit - all this in the countries whose banks have been the most irresponsible lenders. The bankers are demanding that they rebuild their loan reserves at labor's expense, just as in President Obama's program here in the United States but without the sanctimonious pretenses.
The problem is Europe-wide and indeed centered in the European Union capital in Brussels. This is why the major protests were staged there. On the same day that the strikers demonstrated, the neoliberal European Commission (EC) outlined a full-fledged war against labor. Fifty to a hundred thousand workers gathered to protest the proposed transformation of social rules by the most anti-labor campaign since the 1930s - even more extreme than the Third World austerity plans imposed by the IMF and World Bank in times past.
The neoliberals are fully in control of the bureaucracy, and they are reviving Margaret Thatcher's slogan, TINA: There Is No Alternative. But there is, of course. In the small Baltic economies, pro-labor parties have made it clear that the alternative to government shrinkage is to simply repeal the debts, withdraw from the Euro and break the banks. It is either the banks or labor - and Europe has just realized that this is truly a fight to the economic death. And the first test will come this Saturday, when Latvia holds its national parliamentary elections.
The EC is using the mortgage banking crisis - and the needless prohibition against central banks monetizing the government budget deficit - as an opportunity to fine governments and even drive them bankrupt if they do not agree roll back public-sector salaries. Governments are told to borrow at interest from the banks, rather than raising revenue by taxing them as they have done for half-a century following the end of World War II. And if governments are unable to raise the money to pay the interest, they must close down their social programs. And if this close-down shrinks the economy - and hence, government tax revenues - even more, then the government must shut down even more social spending.
From Brussels to Latvia, neoliberal planners have expressed the hope is that lower public salaries will spread to the private sector as well. The aim is to shrink their economies to roll back wage levels by 30 percent or more - depression-style levels - in the belief that this will "leave more surplus" available to pay in debt service. Governments are to tax labor - not finance, insurance or real estate (FIRE), but to impose new employment and sales taxes while cutting back public pensions and public spending. Europe is to be turned into a banana republic.
This requires dictatorship, and the European Central Bank (ECB) has assumed this power from elected government. It is "independent" of political control - celebrated as the "hallmark of democracy" by today's new financial oligarchy. But as Plato's dialogues explained it, what is oligarchy but the political stage following democracy. We can now await the new power elite making itself hereditary - by abolishing estate taxes, for starters - and turning itself into an outright aristocracy. "Join the fight against labor, or we will destroy you," the EC is telling governments.
One can therefore forget the economics of Adam Smith, John Stuart Mill and the Progressive Era, forget Keynes and forget the early 20th-century social democratic traditions. Europe is entering an era of totalitarian neoliberal rule. This was inevitable since the Chilean dress rehearsal after 1973. After all, one cannot have "free markets" neoliberal style without totalitarian control. This is what Wednesday's strikes and demonstrations were about, after all. Europe's class war is back in business - with a vengeance! more