Ireland on the brink: workers face onslaught

Once praised for its fast economic growth, the Irish economy is now sliding into recession. Bernie McAdam and Darren Cogavin (also of the Frank Ryan Soc) look at the need for workers to launch a fightback. This article appears in the latest issue of Workers Power

Occupation at Waterford Crystals
Around 200 workers have occupied the visitors’ centre at Waterford Crystals in a protest at the plant’s closure. Waterford Crystals is part of the Waterford Wedgwood group which had already gone into receivership in early January. The receiver announced on Friday 30 January that 480 jobs out of 708 would go as the company would cease manufacturing immediately. Workers’ anger exploded as the news came out and scuffles with security followed as the occupation got underway. A Starry Plough (flag of James Connolly’s Irish Citizen Army) now flies over the plant and over 2000 people staged a rally outside the plant within 24 hours.

Ireland’s economy became the first in the EU to fall into recession last year. Having boasted the fastest growing economy in Europe, the Celtic Tiger now looks like the lame duck of the eurozone. The European Commission (EC) has predicted a decline in GDP of 5 per cent for Ireland by the end of 2009 – rather different to the 6 per cent growth in 2007.

Unemployment rose to 8.3 per cent in December, the highest rate since 1993. According to the Department of Enterprise, Trade and Unemployment, some 3,350 redundancies were announced in December 2008, a 94 per cent increase on 2007. Job losses are predicted to rise to 11 per cent this year, which means about 400,000 will be out of work.

Employment in the once dynamic construction and building industry has fallen by more than 20 per cent. Construction employers are now demanding a 10 per cent pay cut. Ireland’s massive housing bubble has well and truly burst – property prices are down by more than 30 per cent since 2006.

Next to be hit was the export-oriented foreign sector, the driving force behind the Celtic Tiger. Labour costs are no longer so competitive for foreign capital, so the sector is scaling down. Computer company Dell, which is the largest exporter and accounts for five per cent of GDP, has just announced the transfer of manufacturing from Limerick to Poland with a loss of 1,900 jobs. And Dell is not alone.

Ireland is also in the grip of a major financial crisis. The government had recapitalised the major Irish banks – Anglo Irish, Allied Irish and the Bank of Ireland – to the tune of 7.5 billion euros in December. This wasn’t enough, so at the beginning of this year the state completely nationalised Anglo Irish, the third biggest bank. Its assets had collapsed in value and its reputation plunged on the back of a scandal involving undeclared directors’ loans. Increased costs of the Anglo Irish nationalisation mean that government borrowing has spiralled to 23 billion euros.

Ireland’s financial system reflects its exposure to the property and construction sectors. Manufacturing is in trouble too, as it depends on exporting 80 per cent of its product. As the euro strengthens against the pound and dollar, this makes exports too expensive.

The fragile nature of the economy, despite the 15-year boom, reflects the semi-colonial nature of the 26-county state. Ireland still has a weak indigenous industry and is highly dependent on international capital and trade, in particular US and EU imperialism. In this most open of economies, Ireland’s slump is on course to be particularly severe.

Government Onslaught

The Irish government brought forward the 2009 Budget and announced in November cuts to public sector spending of 2 billion. Huge opposition followed – with pensioners pouring onto the streets, followed by students. Then a series of massive demonstrations against educational cuts around the country culminated in 60,000 marching in Dublin in December.

Means-tested pensions were toned down as a response but a one per cent tax on incomes was imposed. Students are still faced with higher registration fees. More than 1,000 teachers will lose their jobs and many more cutbacks in education are in the pipeline.

Even with the massive cuts, the exchequer will still be 18 billion euros in the red at the end of the year. Now another 2 billion euro cut has been announced. The Fianna Fail/Green Party government is bringing the “social partners” together to implement these cuts and agree a deal, which most likely will see the agreed 3.5 per cent wage increase in September ditched.

The drop in economic confidence has been accompanied by a major drop in political confidence. There has been a huge decline in approval for the government (down 15 points to an historic low of 27 per cent). Leader of the coalition, Brian Cowen, had to fend off a backbench mutiny after his hastily-prepared budget and has yet to recover from his loss of authority.

No to Social Partnership

Social Partnership has seen trade union leaders agree deals with business and government over 20 years, never challenging wage restraint or the massive privatisation of state assets. They have swallowed the lie that if workers lie down then foreign capital will see them right. Of course, multinationals have ripped off Irish workers and now that times are rough, they will quit the country.

In January, the Irish Congress of Trade Unions (ICTU) rejected suggestions that involved basic pay cuts for public sector workers. However, the ICTU has now agreed to discuss how to implement the cuts. David Begg, general secretary, proposed solutions that could “include conditions for deferral of pay increases, restrictions in overtime working, incentivised career breaks, flexible working hours and other innovative measures.”

Begg’s “sensible compromise” is a sell out – deferral of the September pay rise is a pay cut. Further noises about foregoing increments and unsocial hours pay also cuts into pay. But workers have not caused this crisis of capitalism – the greed and speculation of financiers and their friends in government are to blame. Why should working class communities have to shed their jobs, their wages and their services to bail out the banks and capitalism?

Strike and Occupy

Trade unionists who are appalled by their leaders’ complicity in this attack need to organise a movement against Social Partnership and the cuts. We need to use all tools at our disposal: demonstrations, lobbies, local meetings and industrial action. Rank and file opposition needs to be built in every union to pose the issue of cross-sector strike action to defeat the government and bosses’ plans. Action councils need to be built in every locality to tap into the anger and get support from pensioners, students,the unemployed and migrant workers, as well as trade unionists.

The fight back needs to start now – the government has already given notice of more attacks ahead. The massive anger displayed against the draconian budget has not been turned into effective action that can stop the cuts. If the trade union bureaucrats won’t take a fighting lead, then they should make way for those who will. Workers should follow the example of Calcast workers in Derry who occupied their plant last year.

Workers will also need a political alternative to challenge the pro-capitalist parties on offer in Ireland. A new workers party is needed to give a fighting lead and connect to the struggle for socialism. Any mass struggle against the government and bosses will inevitably pose the questions of power and the need for a government that can genuinely side with the workers, based on their mass democratic organisations on the ground.

As Ireland’s economy takes a direct hit, it is imperative that a new workers party is built on a revolutionary basis that can take a lead in launching a serious fight back, hastening the day that capitalism in Ireland is replaced with a Workers’ Republic!

Darren C is a supporter of the League for the Fifth International


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