A year of policy failure and missed opportunity

A year of policy failure and missed opportunity


IT has been a year since Fianna Fáil and the Green Party handed over control of our economy to the EU and IMF.

How have we fared under the diktat of the EU/IMF austerity programme?

Contrary to the positive reports from the troika and the hand- wringing from Fine Gael and Labour, it has been a year of missed opportunities, failed policies and spineless politics.

Back in November 2011 the then government was bounced into the bailout deal. The state was funded into the middle of 2012 and was not in urgent need of funds.

However, the European Commission and European Central Bank, nervous at the impending eurozone crisis, forced the government to accept a bad deal for Ireland.

Fianna Fáil should have held out and negotiated a better deal. They should have focused on investment in job creation, progressive tax reform and forcing losses on toxic banks. Instead, they buckled under pressure and saddled the country with a decade of bank bailouts and crippling austerity.

This was not only Sinn Féin’s view at the time. It was the view of Fine Gael and Labour. Both parties, while in opposition, criticised the terms of the austerity programme. Both, during the election, promised to secure substantial changes. In the now infamous words of Eamon Gilmore, it was going to be Labour’s way or Frankfurt’s way.

Three months later and armed with a massive electoral mandate for change, Enda Kenny and Eamon Gilmore had a real opportunity to dramatically alter the terms of the EU/IMF programme.

Yet within weeks of taking office, the election campaign rhetoric was replaced with a mealy-mouthed deference to the troika. No longer was the Government talking tough. Now they were promising to be the well-behaved children of the eurozone periphery in the hope that good behaviour would curry favour.

In truth they had no plan. For months they sat on their hands, hoping someone would do something to fix Ireland’s problems.

As serious negotiations were under way in Brussels and Berlin, with Greek and Portuguese politicians fighting their corner, Enda and Eamon sat passively on the sidelines.

Eventually, on the back of a deepening of the Greek crisis and growing EU fears of contagion, a significant interest rate reduction was announced for all programme countries. The Government lamely tried to claim this change as a result of its "hard" work. The truth is rather different. The Irish Government struck lucky, on the back of the work of other EU member states.

Fine Gael and Labour went on to miss another opportunity this summer when Greece secured a significant write-down on its private sector debt. When the serious negotiations were taking place, the Irish Government were not in the room. Amazingly, they told their EU partners they weren’t interested in securing a write-down of toxic private banking debt.

Twelve months since the troika arrived and the Government still has no strategy for altering the details of Fianna Fáil’s EU/IMF austerity programme. Indeed it is clear that Fine Gael is using the troika as a smokescreen to introduce policies it supports but has no mandate for, such as the dismantling of the Joint Labour Committees and the sale of profitable state assets.

That the Labour Party would so willingly collude with this ruse is truly shameful.

But the big question, 12 months on, is who has really benefited. Who has been bailed out?

The Government would have you believe that money from the EU and IMF is being used to pay teachers, nurses and guards. Unfortunately the truth is very different. At the end of October the exchequer deficit was €22.1bn. Half of this, a staggering €10.7bn, is money given by Fine Gael and Labour to the banks since taking office, including €3.1bn to Anglo Irish Bank.

But this is not the whole story. A further €10bn was given to the banks by Fine Gael and Labour in July. This is not recorded in the exchequer figures as it came from the National Pension Reserve Fund. A further €3.7bn was injected into AIB by FF at the end of 2010.

So simply put, the deficit is currently €22bn; payments to the banks since the troika arrived amount to €24.4bn. Who is being bailed out? You do the maths!

While pumping these massive sums of money into the banks, Fine Gael and Labour have been cutting funding for special needs assistants and social welfare payments for pensioners, carers and people with disabilities. In December’s budget they plan to wrench a further €3.8bn from the domestic economy in spending cuts and tax increases that will hit low and middle-income families hardest.

The EU/IMF programme has failed. Ireland is still locked out of the international markets. The domestic economy is still flat-lining; 447,100 people are still unemployed; 6,000 are still emigrating every month. Billions of euro are still being pumped into toxic banks.

We urgently need an alternative. Sinn Féin’s pre-budget submission outlines that alternative. See www.sinnfein.ie