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Celtic Tiger defanged

With unemployment rising by over a third in the last year as recession bites in and with a national debt of €45 billion, the Irish government is guaranteeing the bank and building society deposits to the tune of a staggering €400 billion. That’s equivalent to €100,000 for each man, woman and child!

Just don’t call it nationalisation for heaven’s sake. it is merely a temporary measure to “restore balance to the economy” amid assertions that the banking system is still fundamentally sound. This aid guarantees the banks for just two years after which time they will have to pay it back and taxpayers will be remunerated, or so they say.

This emergency action by finance minster Brian Lenihan on behalf of the government is not original, it is not sensible and will probably be disastrous in the longer term. But such considerations have never stopped neo-liberal administrations from protecting the interests of profit-generating capitalist concerns in the past and they’re not stopping them now.

The €400 billion seems a vastly disproportionate amount of money, to put it mildly, for a country with a population of just over 4 million that, geographically speaking, would leave barely a ripple if it were to be dropped into Lake Michigan. But after a decade of burgeoning growth with property prices in particular being wildly over-valued, driven largely by lending institutions dishing out mortgages at several time the incomes of putative buyers, and with property developers and speculators given free rein to overheat the whole economic pot to such a degree that when the inevitable boiling point arrived, emergency temperature regulation seemed the only solution.

The Celtic Tiger is being defanged and it hurts. It all began when our old friend “sub prime” crashed the party last year and began to bring the festive house of cards tumbling down. But there’s worse to come because American investment in both the South and the North of Ireland is immense. So large scale withdrawal by US corporations which is now more than likely, will help to send the place reeling back to the bad old days of recession and high unemployment.

Memories of the “bad old days” in Ireland are still fresh despite all the recent glitter, and behind the optimism there was always the niggling anxiety that all the fevered consumption and all the short-termism would somehow, some day have to be paid for. The days of reckoning appear to have arrived. Or maybe not, because after all money is flooding into Irish banks already. Investors large and small in Britain are moving their assets to the six large Irish financial houses now in the process of being shored up. But now Greece, not exactly an economic powerhouse, has joined the bail-out stampede and is also “guaranteeing” deposits!

Back in Ireland meanwhile, as unemployment continues to rise and living standards fall there is nowhere else to go, for that old spectre and saviour, emigration, is now no longer feasible. The ocean of bad debt, economic downturn and subsequent recession washing over the UK and the US has seen to that.

The mood has been stoical on the whole, but people are getting angry and finally waking up to the possibility that there must be other ways out of the debacle. Minds are being concentrated, so now is a time like no other for the left to rise to the challenge and point out clearly all the ways capitalism has served the many so badly for the benefit of the few, and to demonstrate the numerous alternative and lasting solutions that have been developed.

Fiona Harrington
3 October 2008

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