Topsy turvy Irish budget. Capitalist criminals bail out the bankers, punish the working class victims

There were no surprises in the Irish budget of December 9th, an offensive on the working class so stupendous that the usual clichés fail us. Draconian doesn't begin to describe the attack on the poor, public service workers or the working class as a whole. Calling it the decimation of their living standards is an underestimation.

What is surprising is the demeanor of their attackers. The trembling, white-faced representatives of Irish capital of a year ago, terrified of retribution, are long gone. Now they are filled with a blustering bravado as they accuse their victims of being the criminals - public sector parasites whose modest wages and pensions are the cause of Ireland's ills.

The reason is very simple. All those claiming to represent the working class have consistently argued that workers are guilty and must pay. In the days before the budget the trade union leadership had proposed unpaid leave, flat rate overtime, modifications to the 8 hour day and the five-day week as alternative methods of squeezing the debt out of the hides of the workers. Government, opposition and trade unions all agree a decayed nationalist ideology where all classes bear their “fair share”. The attacks are “balanced” by a cut in the pay of the Taoiseach and government ministers (not a great pain when it turns out that they pay themselves at the same rate as the leaders of the major European powers). A “National Solidarity Bond” is introduced, based on the idea of a “patriotic bond” proposed by sections of the trade union movement.

It was against this background that the much signaled centerpiece of the budget was announced - 1.3 Billion Euro from public sector pay as part of a 4 Billion Euro cut in the public sector budget that included pension cuts, increases in the pension age and cuts in welfare payments and child benefit. Left almost unmentioned were the cuts in services. Some cuts had been factored in before the current budget. Others will only become apparent as services are slowly strangled. Yet again the poor are to meet the debts of the rich.

Ironically, the other big debate in the media at the time of the budget was the Ryan Report on the Catholic Church hierarchy’s collusion in child abuse. Yet another reminder that the ruling elites have impunity for their actions however criminal. This debate hinged around whether resignation of some or all of the bishops named in the report would be sufficient to redress the harm done to their victims, completely ignoring the fact that the church itself would escape having to pay for its crimes. Instead the primary victims of the Catholic Church’s reign of terror in Irish society, the working class, would pick up the tab, estimated at 1.3 billion euros, the same amount as the wage cuts in the budget. While every agreement and condition that workers accumulated over generations were being torn up, corrupt deals to protect the church’s wealth or golden parachutes for crooked bankers are sacrosanct.

As with every aspect of the credit crunch, the government dressed up the budget in a tissue of lies. Brian Lenihan assures us that this is the “last big push”, Yet the government rejected a craven offer of collaboration by the trade union leadership because it tried to haggle agreeing to a wage cut while holding on to the basic rate of pay. Taoiseach Brian Cowan declared that (the pay cut) “was necessary and, from a government’s point of view, has to be permanent.” Pay rates are to go down, go down again and stay down. That reality was underlined by the treatment of the young unemployed, who had welfare payments savagely cut below the poverty line. Ireland's future under capitalism is as a permanent low wage economy. The reality behind the lies was illustrated most sharply by the fact that the budget is not about €4 billion cuts but about €54 billion cuts - the balance being the bank guarantee built into NAMA. The Irish government and the European Central Bank have worked together to keep this off sheet, but it will dominate the economy for generations.

Insofar as the reaction of Dail parties outside the government can be considered opposition, they hang around Keynesian notions of government investment to support industry and economic development. The sections of the budget dealing with reflation can best be described as farce. These amount to: a reduction on alcohol duty to compete with a weak pound, protection of the road-building plan, an extension of mortgage relief and a car scrappage scheme.

The budget maps out Irish capital's plans for responding to the credit crunch and the fall of the Celtic Tiger. Plan B is to run plan A all over again, the politicians believe that if wages can be driven low enough, low taxes for companies protected and enough public money thrown at bribes and infrastructure then the Tiger can be reborn. So the guarantee to every failed banker and speculator is absolute. Attempts are made to protect those elements of infrastructure of direct use to the transnational companies, while plans for a public transport system for Dublin are scrapped and water supplies; health and capital spending in education remain abysmally low. The idea that Ireland might gain from the oil and gas resources given away to the Shell company is literally unthinkable.

The other elements of the budget show the pathetic state of Irish capital. Tax on alcohol is cut to help the publicans and VAT cut to help traders. The government bemoans the flight of capital to the North while having bent every sinew to copper - fasten partition and the economic division that makes the imbalance possible. Mortgage interest relief is extended to prepare another housing bubble rather than offering a freeze on repayment and repossessions that would go some way to protecting workers. Perhaps the most telling element of all is the scrappage scheme. In Germany, with a native car industry, the measure benefited German industry. In Britain, where there is no native car industry, there are still many car factories. In Ireland the 'car industry' is a collection of showrooms.

And that is the central dilemma in Ireland. Irish nationalism has failed, failed and failed again. It has failed so completely that the projects it was founded on - an independent Irish economy and a bourgeois Irish democracy are no longer possible – In fact are actively opposed by Irish capital. This budget is a budget of desperation and ruthlessness. Irish workers are to be ground into the dust to meet the needs of international capital in its purest form - the bond markets that service the debt. The workers are to be crushed again and again, because the only possible capitalist futures are a Celtic Tiger mark II based on wages competitive with the poorest parts of Eastern Europe or a sub-80's Ireland with a stagnant economy and the emigration boats full.

It is a high-risk strategy. Both the government and the loyal opposition of the Dail parties and the trade union leaderships are discredited. Other countries have tried to avoid so direct and savage an attack because of the danger of large-scale social unrest. Even this early on a section of the state apparatus – the Garda – is threatening strike action. What holds opposition in check is the utter decay of existing working class leadership and the absence a movement offering a political alternative. Only the working class can provide an alternative by shaking off the cloying nationalist ideology that wants us to pay a fair share (that is, the whole bill) organizing independently, calling for the corrupt government to be forced out of office, repudiating NAMA, working with the bank workers to open the books on corruption, seizing the assets and repudiating the debts of the bankers and speculators, taking control of oil and gas resources, taxing the local rich and the transnationals, organizing the economy to meet their needs and linking with workers resisting across the globe to form an international network of solidarity, an international opposition to the rule of the bond markets, the bankers and international capital.