The Irish financial melt-down and popular resistance - interview with a WSM member


In this detailed interview for the North American Ideas & Action site Kevin Doyle of the Cork Branch of the Workers Solidarity Movement answers questions about the current Irish financial melt-down and the popular resistance. [Spanish translation]

The Irish Struggle Against Austerity

Q: Thank you, Kevin, for doing this interview with the Workers Solidarity Alliance’s on-line journal “ideas & action”. Before we begin the interview, I must say, it almost seems like yesterday you out-migrated to NYC for a bit, and we were sitting face-to-face discussing anarchist politics and the world around us. All this, of course, before the “Celtic Tiger” started to roar. Must seem a bit odd, having been back in Ireland all these years to now see the growth in the out-migration movement again.

A: It is strange. The crash has happened very quickly and taken many people by surprise; the scale of it has been beyond what anyone expected.To put things in perspective though. As many of your readers will know, emigration out of Ireland to places like the States has been a feature of Irish life going back generations. I first met you in New York back in the early 80s when Ireland was last in a harsh recession. So I remember that period well and I know that it was hard for many of us – there was a lot of unemployment here and of course with that came poverty and displacement.

The boom here, the so-called Celtic Tiger era, came against that background. Short lived though it was, it was welcomed by many people. Some imagined that as a country we had turned a corner and that we had banished the ills of mass unemployment and emigration for good. That was not the case – as we now know.

Here we are now, in 2010 and we have been plunged into a new and desperate economic period, one where the costs will, in large measure, be borne by the Irish working class – once again I might add. Unemployment has shot up. And employers are using the new climate to attack wages and conditions. It is a period of high insecurity for people once more.

Q: The Irish financial crisis seems to have come to a head recently. But it was a while in the making – is that so?

A: Yes. The roots of the problem go way back. Of course there is a specific Irish context to what is happening here right now. But it is worth noting also that what is happening in Ireland right now is linked to the generalised crash that broke over the world’s economy in 2008. The old cycle of ‘boom and bust’ is at play here – classic capitalism, I suppose.

Q: Can you please tell us how Ireland came crashing down from being the “Celtic Tiger” to its current situation. It seems like all the “right” social and economic ingredients have been in place for a long while (for example, a very low tax rate and a docile trade union movement which long ago bought into the “social partnership” concept)

A: A lot has been written about this. There are a number of aspects to the situation but I will try to be brief and as accurate as possible. I would recommend a particularly good article in the current issue of the Irish Anarchist Review by Gregor Kerr called ‘Bubbles, Booms and Bust’. It gives a lot more detail than I can here.

First off the Irish economy is a peculiar entity. Indigenous industry here has been historically weak – the legacy of British imperialism. Ireland’s economic elite in an effort to get around this attempted to reposition Ireland as a tax haven for multinationals in the latter quarter of the last century. Ireland adopted a very low ‘corporate tax’ rate for those who ‘invested’ here. Similarly, other inducements were offered – educated English speaking workforce and so on; lax environmental oversight also.

Ireland became a very ‘competitive’ location for capitalism from the mid 90s onwards and investment flowed in. ‘Competitive’ here of course is neo-liberal speak for a ‘low-tax location with a compliant workforce’. That was what Ireland was offering to the multinationals.

With this foreign investment, unemployment here decreased and with that, for the first time in a generation, the indigenous construction industry revived. Irish property values were low relative to our European neighbours and our hosing stock was also old. In effect a construction boom took hold in this environment. A key aspect of this was land speculation: massive money was made by ‘developers’ linked to Flanna Fáil party and others. It was a heyday for some and the industry swelled out of all proportion to requirements. To give your readers one figure: 750,000 housing units were built between 1995 and 2007.

The banking sector is at the centre of the current crash. In truth it is this sector that has driven the Irish economy to the wall. To understand why we need to appreciate that a few factors were at play. First of all the banking sector grew disproportionately during the boom as a result of the boom in property values and the building spurge. Some of this growth was legitimate, but most wasn’t.

As the building/ property boom took hold wild speculation on land and valuations became the order of the day. It seemed at one point that Ireland would be covered in housing and buildings! I’m exaggerating of course but it is true to say that there was frenzy. Massive money was being made by the greediest of elements in society – many of whom had the ear of the Government and main political parties.

Secondly there had been deregulation in the banking sector – this was government policy and facilitated a lot of shady dealings at the Irish Financial Centre in Dublin. As a result there was no serious oversight and caution was thrown to the wind in terms of the lending criteria. A particular important ‘player’ in all of this was a bank called Anglo-Irish Bank. This bank is credited with over €60 billion in bad debts now – and we still don’t know if that is the full extent of the losses at that one bank.

During the boom the adage (among the bankers) was ‘Where Anglo goes others follow.’ Anglo had close links to Ireland’s economic elite. It lent recklessly – in Ireland and more importantly abroad. Its CEO, is now widely acknowledged to be a crook – and that is being kind to him. He appears to have lent vast sums of money to those who were his friends. As Anglo-Irish began to sink he even lent a fortune to the directors of the bank to buy shares in the bank to shore up the bank’s share price!

All this was big trouble – very big trouble. But the Irish government then got involved and they made it a lot, lot worse. Anarchists have little respect for governments – well here is an example of why we don’t. Clearly a big element of stupidity was involved but, of course, it would be naive to not point out also that the Irish government was also looking after its friends in the Golden Circle.

Q: What is this – the Golden Circle?

A: Here in Ireland we call the moneyed elite, the Golden Circle. This is because the elite in Ireland are confined to a relatively small number of identifiable people. They all know each other personally and have close connections to the key decision makers in government. If a lucrative situation is developing they tell one another about it. They are people who creamed off the big profits in what went on here over the years.

Q: So what was it the Irish Government did that was so stupid?

A: When the crash occurred in the international markets in 2008, the Irish government ‘guaranteed’ all bank debts. The problem was the Government had no idea when it issued the guarantee how large the debts were in the Irish banking sector. Crucially it guaranteed the debts in Anglo Irish Bank.Now two years on from that time, we are finally getting to the bottom of a very deep hole. It has transpired that the debts in the banking sector were significantly larger than expected. The debts at Anglo Irish Bank were astronomical.

The current Government has nonetheless stood by its ‘word’ and as a result the Irish State has been sucked into the banking And there you have it: now we are being asked to pay for all of that!

Q: How would you compare, if possible, the Irish situation to the Greek? Are the EU “bailout” plans the same?

A: I cannot admit to knowing enough to offer you a detailed view but in broad terms they are similar. At the root of the problem is the need for the Irish and Greek government to borrow to meet current needs. These debts have exceeded the budgetary limits set by the European Union.

There are different reasons though for why Ireland and Greece have ended up in this place with this particular problem. In other words we arrived at this place by different routes. And of course as we speak, both Portugal and Spain are also facing trouble. So there is a broader problem as well.

What is most significant and illuminating though is that the medicine that Ireland and Greece are now being asked to swallow is almost identical. Surprise, surprise! In both countries it is the ‘public sector bill’ that has been targeted. What this means is that cuts are targeted at social services – welfare, education and hospitals. Cuts are proposed for workers in those eras and pension entitlements and job numbers are also being reduced. As your readers will know this agenda is the agenda of neo-liberalism.

Q: How is the generalized fight-back coming along against the proposed austerity measures?

A: In the aftermath of the crash in 2008 the Irish government led the pack of wolves when it came to imposing cuts on the population. ‘Tough times require tough medicine’ and all that rubbish was the order of the day.

Ordinary people were in shock though. Unemployment grew rapidly; the scale of the unfolding building bubble fiasco was emerging. Building work, a huge employer, collapsed. Many people found themselves in immediate debt as houses they had paid excessive prices for were down valued overnight. There were mobilisations in the public sector – among teachers and there was one day public sector strike. But overall people were reeling and they accepted what they were told.

In the last year though the true scale of corruption among the elite has come to light. In particular the massive corruption and back-slapping in the banking sector has been exposed. The Anglo-Irish debts have got bigger with each passing week. Many of those responsible for outright thievery are still in their jobs! In the meantime, the Government has had one message: you, the ordinary worker, must bear more pain.

We have just had a march of 100,000 workers in Dublin. It was organised by the ICTU and was a very positive showing. I am not exaggerating to say that there is massive anger. The IMF and the ECB – the EU’s bank – have now signed the ‘bailout deal’ with the disgraced government. A budget outlining exactly what cuts will take place is imminent. The question is what is going to happen.

Q: What is your impression? Is there a “unified” trade union and left mobilization on-going?

A: There are signs of mobilisation and of some grassroots organising. I stress, some. But I think we need to be hopeful here because any sign of organising at a grass roots level is crucial and very healthy. As your readers will appreciate, the Irish trade unions are very top-down structures. Rank and file participation dwindled during the ‘partnership’ era which spanned from the late 80s until today. ‘Partnership’ gave a big role to union full-time officials – the union leadership I suppose you could call them – and in effect led to rank file involvement ending. But to take an example: at the march just mentioned in Dublin, the head of the largest union, Jack O’Connor was booed when he spoke. There is anger among workers that the unions are not doing enough. The old story, the union leaders talk the talk but that is all – they are sheep in wolves clothing.

So officially the trade union movement is opposed to what is happening. But the leadership is scared of any big mobilisation and not being able to control it. Also the leadership has no real plan. All they have called for so far is ‘a longer period’ of payback to the international banks. In other words: ‘we will take the pain if you deliver it over a longer period’. Lunacy!

So the key question is, will the rank and file rise? I do think there are positive signs. We have to remember that workers are taking the brunt of what is being done. And this is a scenario that is not going to go away soon. One group who resisted so far are the pensioners – and they won! So fighting back works and deep down people know that. But against that unemployment is high and people, naturally, are cautious. There are also big debt problems for many. Thirdly the Irish media has played a significant role in saying ‘there is no other way – you must accept the situation’. We’ll see.

Q: What role has your organization, the anarchist WSM, been playing in this fight-back?

A: We wish we were a lot larger and that we had much more influence at a time like this. But that said we are doing as much as we can to make ourselves heard. There are a number of different areas in which the crisis is being fought. Among the workers in their unions, among students and also in the various ways at a community level – where many of the cuts are already being felt first hand.

The main thing we are pushing of course is the idea that we must fight back and that we must resist; the sooner that we do this the better. This may seem like an obvious point to be making but the media and the Government really bang on and on that people should accept the situation that we are now in. So there is a role here for us as anarchists at a very basic level. Fight, resist!

Secondly in all areas, but particularly in the workplace where it is crucial, we argue for ‘taking back the unions’. As mentioned above rank and file involvement is very low now. But it is becoming clear to a minority of union members that the union leadership will do nothing – unless pushed. So at this moment putting ideas out there about self-organisation and about democracy in the unions is very important. In all areas there is a need to push for this.

Q: How does the WSM differ from, say, other leftists and the militant wing of the trade union movement during this crisis?

A: The clear and overwhelming direction of the left and even the militant left at the moment is towards electoralism. I haven’t mentioned this so far but it is a very important aspect of the current crisis. The current Government – a collation of Flanna Fáil and the Greens – will fall soon. It is becoming clear also that in pure electoral terms the voting public are moving left-ward. So the Irish Labour Party is set to do very well.

Political parties to the left of Labour are eyeing up this situation too. What’s new? A new electoral block linking the Trotskyist parties and some independents has just been formed. It is called the United Left Alliance. Their efforts are now directed at getting TDs elected to the next Dáil (parliament). It is the old story – they are playing the electoral card to the detriment of grass roots fight back. They will of course use any grassroots network for their own electoral ends – and damn the consequences.

Look, as anarchists, we know this story and it happens again and again. So we must counter this and we must do what we can to build an independent anti-electoral opposition. This is our aim.

Q: As anarchists, we agree that the final goal is workers and community self-management. In the meanwhile, are there any constructive immediate and medium solutions that the WSM may be posing to address the crisis and suffering?

A: The downside of all this is that there is a long way to go. As we do this interview, the IMF/ECB bailout has been in effect signed into a reality. This means a four to five year period of attacks lies ahead. The upside of this though is that we have time to make inroads and build resistance. I think this can be a period in which the anarchist movement makes a breakthrough. As they say, now or never. But it will not be easy and our numbers are small against the general forces that face us.

Q: In closing, on a personal note, let me hope that you and your family won’t be devastated by the crisis. On behalf of our organization, we wish our Irish sisters and brothers good luck and success in your fight-back.

A: Thank you and I will pass on your good words of solidarity to our comrades. I might add that we appreciate the interest that you take in what is happening here. The reality is we cannot make a real impact without international solidarity. And an important part of that process is that we get the information out that this is just more of the same old business of greed and capitalism. This is the second major recession I have now seen and it is worse than the last time. There is a better way to live and we need to build it for ourselves and our children and our brothers and sisters. Thanks and solidarity to the WSA.

BIO SKETCH: Kevin Doyle is a writer and political activist from Cork in Ireland. He is a founding member and activist with the Workers Solidarity Movement and he has written extensively on anarchist ideas and the libertarian tradition.  

WORDS: ideas & action is the publication of Workers Solidarity Alliance, an anti-capitalist, anti-authoritarian organization of activists who believe that working people can build a new society and a better world based on the principles of solidarity and self-management.