Saturday 23 February 2019

Gene Kerrigan: Suddenly, everyone favours 'growth'

The music's stopped but Enda is still dancing to the same old austerity tune, writes Gene Kerrigan

This is embarrassing on so many levels. Enda Kenny was revving up to full speed, poised to ram through his fiscal treaty referendum. Angela Merkel was happy.

Greece was all squared away, bullied by EU bureaucrats and sneered at by Michael Noonan. Whatever Angela said, she could be sure that Little Nicky Sarko was standing a yard behind her, nodding enthusiastically. And, in Germany, ratifying Frau Merkel's fiscal treaty was routine.

Now, a week later -- well, it's embarrassing. For Enda, for Angela, for Little Nicky Disappearo. And, frankly, on a personal level, I find the latest turn of events to be mortifying. Suddenly, austerity is questioned and right across Europe everyone's into "growth".

The Greek electoral upsurge against austerity was bad enough. Then the French threw out Little Nicky for totally buying into the Merkel agenda. The incoming French president won't ratify the treaty until he gets a little growth sweetener.

Then Merkel herself found she couldn't ratify her own fiscal treaty in the Bundestag. The German Social Democrats have revolted against the one-note policy of austerity.

This was especially painful for Merkel, as she had carefully prepared her schedule to influence the Irish vote on May 31. The plan was to ratify the treaty six days before the Irish referendum. Here's the Daily Telegraph: "She had intended the ratification, to be choreographed with a symbolic, simultaneous vote in the Italian parliament, to put pressure on the Irish to vote 'Yes'."

Red faces all round. Enda's embarrassed, Angela is distressed, Little Nicky is scarlet. And even the Soapbox Anti-Austerity Department has reason to be mortified by this turn of events. Let me explain.

From the beginning, the policy of austerity has been a no-brainer. By that I mean that you need a complete absence of brains to believe it would work.

Some of us rejected austerity after the bubble burst in 2008, and Fianna Fail attacked pensioner benefits. We were right, the austerians were wrong. They've screwed the country and they've gone a long way towards screwing Europe. We were right not because we're smarter, and certainly not because we're experts on the economy.

We were right because we pay heed to the accumulated wisdom of humanity. There are some things that our forebears learned the hard way: If you smell gas, don't go looking for the leak with a lighted match. If there's a fire in a building, do not take the lift. Don't use a telescope to check out a solar eclipse. When you hit an ice patch, don't slam on the brakes. And if the economy goes into depression, you can't cut your way out -- you need to protect jobs and encourage growth.

This economic collapse is simply too big for the usual remedies from the neoliberal toolbox. You can't solve such fundamental problems without drastic change.

What has been damning all along has been the blatant weakness of the case for austerity. How will it work? Whether it's Enda or Angela or Mario Draghi, a newspaper columnist or one of those pet economists -- the answer is always the same: it will "restore confidence". That's all. Then, apparently, what's become known as the Confidence Fairy will wave her wand and the job's Oxo.

What's embarrassing for us -- the lefties and malcontents who have opposed this insane policy from the beginning -- is that suddenly everyone's a fan of using economic growth to fight the depression.

It was embarrassing enough when some right-wing media folk made grumbling noises about the need for growth. Then Ibec, which has done a lot to sabotage growth, began wondering why its members are losing their businesses. By attacking the purchasing power of the public sector, we warned, you are undermining private-sector jobs. But they continued with their kneejerk solutions -- and now, they too want a shot of growth.

We here at Soapbox were already embarrassed that so many of the clueless austerians, starting to panic, were suddenly agreeing with us. Then, in the final humiliation, last week the Institute for International Finance, a global cabal of bankers, called on Germany to "re-evaluate the current economic strategy", and "rebalance the growth-austerity equation". The bankers are with us.

Too late, folks. The notion that, at this stage, an injection of Keynesian stimulus will do the job -- well, we all have our fantasies.

The old right-wing solution was: you must impoverish the medium and lower-paid workers, and cut services, in order to balance the books and give "confidence" to the markets.

The new right-wing solution is: you must impoverish the medium and lower-paid workers, and cut services, in order to balance the books and give "confidence" to the markets, thereby creating growth.

Over the past few days, you could hear versions of that from Germany, France and even The Irish Times. Behind this cosmetic use of "growth", the usual madness continues. When Greece got uppity last week, there were threats that the EU would refuse to give them the €5.2bn scheduled in the "bailout". Some chance. Eventually, the EU gave the Greeks €4.2bn, making a big deal of withholding one billion.

These are not bailouts, we malcontents said on this page on the Sunday after the Irish "bailout". They are stitch-ups. Of the €4.2bn the EU gave the Greeks, €3.3bn was immediately paid straight to the ECB. It's part of the banker bailout. But that €3.3bn changed, as it was channelled through Greece. It became sovereign debt on which Greek citizens will be charged interest. These "bailouts" are part of the mechanism for transferring private debt to citizens.

Meanwhile, although the music has stopped, Enda Kenny keeps dancing to the same old tune. He won't postpone the fiscal treaty ratification, though even Merkel has had to. The treaty will be reshaped and Enda doesn't know what will change. However, changing his mind would be a sign of weakness. We must "send a message" to investors, he says. "They want certainty, they want decisiveness, they want clarity of a horizon", he says, with great sincerity and without any meaning whatsoever.

Enda has been a TD since 1975. During his first 36 years in the Dail he served two-and-a-half years as a minister. He's very energetic, he's apparently a very nice man. But what you see is what you get.

Logic says any Irish government aware of the speed of change -- and its dangers -- should postpone the referendum. Enda is in a bubble. Rather than assess a problem and adapt, he repeats the slogans his spin doctors write for him.

Recognising this in 2010, Richard Bruton, Simon Coveney, Leo Varadkar, Brian Hayes and others tried to dump him. "I, unfortunately, no longer have confidence that Enda Kenny can provide the leadership that this country needs", Bruton said.

Enda and bruiser Phil Hogan saw off the inept coup. So, as the currents within Europe shift and flow dangerously, our leader is frozen in time, mouthing his slogans: heart of Europe, send a message, meeting our targets, best little country in which to do business.

Embarrassing, on so many levels.

Sunday Independent

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