Tuesday, 23 November 2010

Haircuts All Round?

A GUBU Day if ever there was one, I'd say : little Ireland threatens to crash the Euro simply by not rolling over immediately to the idea that they should all go back to potato farming and emigration. It's that pesky democracy thing getting in the way of sensible business decisions again. Cowan is surely done for, his reputation as well as career in tatters, surely now seen as little more than a pet Quisling of the IMF/ECB.

Fintan O'Toole is calling for a caretaker administrative coalition and a Italian 'Mani Pulite' ('Clean Hands') style re-founding of the State. Remarkably, he is calling for this to kick off with a national-popular show of strength based round the Trades Unions:

".... the people of Donegal South West have to refuse to vote for Fianna Fáil – at all. They can deliver a clear message that this Government has no mandate to conclude any deal.

.... hundreds of thousands of people have to get out on the streets for the Irish Congress of Trade Unions demonstration on Saturday. Forget what you think about the unions – this is the one chance citizens have to demand a choice. Whether you agree with Ictu’s alternative plan or not, the idea that there should be a coherent alternative is crucial to the survival of our democracy. Without it, an election will be an empty ritual.

.... I intend to put up on my website (fintanotoole.ie) by the end of the week a list of 10 basic demands for changing our political culture and system.

If people agree, they will be able to put their names to the demands, which include a €100,000 salary cap for public officials, a change in the electoral system, a shrinking and overhaul of the Dáil, and measures to kill the toxic three Cs: clientelism, cronyism and corruption.

What matters most is that we cease to be an invisible people. That our government is irrelevant is their fault.

That the people are irrelevant is ours.

Sovereignty belongs, not to the State, or the government, but to the people. We have outsourced it for too long to an incompetent, amoral and self-serving elite. Now we face the starkest of choices: use it or lose it." (my emphasis-CMcM)

Now, see these stirring words in the light of the news from Moody's, the rating agency; The FT is reporting that they now think that some European infrastructure and utilities companies are more creditworthy than their parent States because they are less likely to default.

The 'rescue package' being forced on Ireland is one that brings the country to the very brink of default - and much of the money is actually simply passing through the hands of the Irish State and the (predominantly state-owned) Irish banks to flow back to their foreign creditors in London and Frankfurt. Much of the discussion in the British left blogosphere - even at sensible places like Duncan's and Chris'- seems to ignore this dimension. A lot of that £7bn Osborne is coughing up 'for a neighbour in need' is actually going to end up in RBS and Lloyds.

&, yes, just in case you think I'm being simple minded here, I do understand money circulates: but it circulates under very precisely defined relationships of power- and the money is being provided to tighten those relationships in a way that erodes the democratic freedoms of the Irish people and maintain, at all costs, the capital of the European and City bond markets that made so many dodgy investments across the Irish Sea.

Whatever happens - poverty, mass emigration, the destruction of a State - these City Institutions must never, ever have a 'haircut' as their slang has it. (A haircut being the prospect of them losing money.) Whole economies must crash and burn before that happens.

I say: it's time for the Irish people - the people of all Europe - to pick up the scissors and advance towards the barbers chair. But not to ask if the bankers need 'anything for the weekend': democracy or bankocracy is the question.

`Addendum:& the inevitable xtranormal comment


  1. Since the new loans are to avoid a default, I'd be interested in finding what support there is for defaulting rather than borrowing more. It was an option and one would have thought *if* it were popular then the Irish government would have given it serious consideration. I wonder why they haven't?

  2. My understanding is that there is an option before default - or at least technically before default, even if political circumstances mean that it might come to the same thing: leaving the Euro and refloating a (highly devalued) punt.

    The problem here is that various political and banking nabobs in Brussels and Berlin have talked up this idea as tantamount to the destruction of the Euro - and even of the EU itself. So we have a circumstances whereby a small nation of 4.6 million people is being presented as carrying the future of the whole core European economy on its shoulders.

    Basically, I don't think this is tenable.