Friday 22 November 2019

Europe will listen when we start to make noise

When the State thinks our savings are there for the taking, it's time to say 'enough', writes Brendan O'Connor

There was much solemn talk the weekend we took the EU/IMF bailout about our loss of sovereignty, but as time goes on it becomes clear that none of us understood how real that loss of sovereignty would become.



The proposed raid on our pensions by the Government last week, a raid of which some have questioned the legality and the constitutionality, has been a tipping point for most people. Somehow, up to now, we have put up with being raped and robbed to pay off other people's debts. But the great pension grab has led us to finally realise that democracy has now been suspended in this country and the current administration, as a collaborator with the German forces of economic occupancy, is willing to do whatever it wishes to appease the ruling colonial powers. We are now living in an economic dictatorship where even your savings are not safe anymore. Anything the Government wishes to do to try and rebuild this economy in any way will have to be taken from the rest of us, and the rest of us will have no say in this thievery.

In a way it is our own fault. We, after all, were the ones who voted in a government that had such a massive majority it would never need to be answerable to the people. We were the ones, who, in our frenzy to wipe Fianna Fail from the face of the earth, voted in a tiny, fragmented, impotent opposition. We were the ones, who, in our quest for change, gave absolute power to this Government. And very quickly we discovered that the only change would be that this Government would be stronger than the last and thus more able to walk all over us. They would pursue the exact same economic policies as the last Government, but while the last Government were compromised and in a state of breakdown, so there was some hope of arguing with them. This Government has strength, a strength given to it by us, but a strength it is not using for our benefit.

To put some context on all this let's remind ourselves again of the bigger picture. Because it is easy sometimes to forget what all this is really about. The clearest summing up of the big picture that I've read recently was Gary O'Callaghan's excellent piece in the Indo on Thursday. O'Callaghan is Professor of Economics at Dubrovnik International University and a former IMF staffer. He put forward three salient questions that the EU needs to ask about the Irish, Greek and Portuguese programmes. These questions are worth repeating. Firstly, O'Callaghan says, the EU people need to ask why they are giving us financial assistance. The answer is, O'Callaghan says, because without these programmes peripheral countries would default, leading to a banking crisis and a recession in the core eurozone countries. Secondly, they need to ask themselves if they want these programmes to succeed.

The answer is obvious, O'Callaghan points out, but once they accept that of course they want the programmes to succeed, then they need to promote the success of these programmes, so things like punitive interest rates need to go out the window. And finally, they need to ask how important it is that the bailout programmes succeed. The answer of course is that it is crucial to the survival of the euro that the bailout succeeds, and therefore the success of the bailouts should take precedence over any other agenda -- like, for example, that of getting rid of our favourable corporation tax.

O'Callaghan's logic is deadly and incontrovertible. Europe is doing this for its own interests and it is vital to Europe's survival that these bailouts work. Therefore Europe should be helping the bailouts to work and not punishing us. So why then does Europe seem like our enemy on this one? It is only doing it to save its own ass, we have been more than amenable to it and our leaders have rarely kicked up or asked any hard questions. Yet Europe is working against us, insisting on a deal that practically every economist you ask tells you will destroy our economy.

And why is our own Government working against us on this? Why have they been so unwilling to threaten Europe, or even discuss with Europe the idea that this economy might be forced to do what we need to do to survive and grow?

It is all irrational. Europe is behaving irrationally and so is our Government. It would remind you of the great old days of denial during the tenure of the last Government.

And when it does make some timid move towards doing something to try and grow this economy, what does this Government do? Well, it does a little jobs initiative that everyone, even the Government, agrees will not go far towards solving our problems. And how does it pay for it? Why, it pays for it the only way it can. By robbing the savings of workers in the private sector. Because it seems that the two other potential sources of income are non- negotiable.

The other two ways of offsetting the money for the jobs initiative would be to pay back less of the banks' debts or to cut public spending. But it seems public sector pay and European banks and bondholders are untouchable, but somehow the savings of people in the private sector, money they have sensibly put aside for when they are old, so they do not become a burden on others, enjoys no such ring fencing. So before they will stand up to the EU or the banks or before they will stand up to public sector unions, the Government will literally steal money from the pockets of the private sector.

And they can say what they want about the fact that private sector pensions enjoy huge tax breaks, the fact is private sector pensions for the most part represent only a deferral of tax paid. And that's before you even consider that nearly all pension schemes in Ireland are decimated at the moment anyway.

So this dictatorship of Germany and our own local Vichy regime has essentially decided that only one group of people in society should be asked to pay off debt and that is ordinary people. It is ordinary people who are being, according to the Master of the High Court, driven to suicide by hounding from the banks. And meanwhile, in the world of banking and business, the normal rules apply, whereby people are not required to pay back what they can't pay back, and where the future prospects of a business or an individual take precedence over the past. It is broadly speaking a concept known in accounting as sunk cost.

The European Commission told us last week that our debt will reach 112 per cent of the size of our economy this year. That's modest next to the Greeks, whose debt will be 166 per cent of the size of their economy next year. The difference, probably, is that our Greek friends have no intention of paying any of it back, whereas we seem determined to pay back every red cent.

The Commission told us this in the context of revising down its growth predictions for Ireland for this year. We will now apparently grow by just 0.6 per cent this year, instead of the expected 0.9 per cent. How they expect us to grow at all, given what they are doing to our economy, is incredible. Growth is the only solution to our mess, yet the German army of economic occupation and the collaborative local regime are doing everything they can to make sure we don't have growth. Because there is a greater interest at stake than the interests of this country. And that is the interests of the Fatherland, and, as Morgan Kelly so memorably put it, the concerns of the German tabloids.

We can only hope that those who say there is a cunning plan behind this, and that we are only playing along for now until the time is right for an overriding deal to be done, are right. If not, we are facing a very messy scenario, whereby the people are becoming steadily more decoupled from the Government and from the economy. Our rulers allow that to happen at their peril.

We are easygoing people up to a point. But when we snap we tend to go bananas. If they want any clues as to our extreme temperament they should perhaps look at how we handled our boom. Increasingly, it is looking as if we should be showing more of our hot-headed side. Being good has got no results. And none of the plans or the actions we have taken, none of the pain, has had any of the promised consequences.

When Lucinda Creighton told the nation during the week that we wouldn't be getting any hearing in Europe right now because other people's problems were more dramatic, it made a lot of people think that maybe we need to push ourselves up the agenda a bit by making some noise. The only thing we can say for sure about that is that it is not our Government who will be making the noise.

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