Saturday, 28 July 2012

The Austerity Treaty (and its discontents)

One aspect of the voting pattern in the referendum on the Fiscal Compact Treaty on 31 May last that was strangely remarked upon by, among others, the Financial Times and the Economist was what the Financial Times called the “class divide” that it revealed.

Five constituencies voted No, three of them Dublin working-class constituencies—Dublin North-West, Dublin South-West, and Dublin South-Central—and the two Donegal constituencies. Academic gurus were cited as finding a growing “left-right” divide in Irish politics, caused by austerity.

Four major unions—UNITE, the TEEU, Mandate, and the CPSUcampaigned for a No vote, on the grounds that the Fiscal Compact regime would not create jobs and is in effect anti-worker.

The referendum clearly revealed an understandable measure of alienation among a section of the working class at the price that it is being forced to pay by the present economic crisis.

But that alienation was not a sufficient basis on which to mobilise a No majority in the referendum, much less to build a politics that can get the country out of the crisis.

The Yes campaign was based on the usual combination of patronage and blather but also skilfully used the fear that a No vote would cut the country off from access to economic recovery. A No vote would mean the country being barred from the European Stability Mechanism (ESM).

The No campaign emphasised austerity but largely failed to bring home the fact that there were significant issues about the European Stability Mechanism.

There was little understanding that constitutionally the ESM Treaty and the amendment to an existing EU treaty authorising the ESM Treatyrequire a further referendum in Ireland, and that politically the EU treaty amendment provides Ireland with a veto that is a powerful bargaining card with which to bargain for relief on the private bank debt.

Compliant media failed to tell the people that in fact the ESM was much more complex than what it was being portrayed as, and that in fact “best boy and girl in the class” behaviour can get us nothing but more and more austerity.

Enda Kenny’s reflections a couple of days after the referendum are very revealing about how he understands his role as head of the government of what its constitution still describes as a “sovereign, democratic, independent State.” He proclaimed that the Yes majority “strengthened Dublin’s hand in its negotiations in Europe over introducing measures to boost growth and in dealing with the tens of billions of euros of bank debt that Ireland had assumed during the crisis.”

He was probably not even aware of how ironic his statement was. In four years the state will be marking the hundredth anniversary of the 1916 Proclamation, which asserts “the right of the people of Ireland to the ownership of Ireland and to the unfettered control of Irish destinies.” The great and the good of the state will be dancing at the crossroads to mark the event.

Having to “negotiate” with others so as to be able to “introduce measures to boost growth” is clearly not the mark of “unfettered control,” nor is having to lay out 40 per cent of the state’s GDP to bail out banks on the instructions of others an assertion of “the right of the people of Ireland to the ownership of Ireland.”

But even more bizarre was the admission made a few days before the referendum by the Fianna Fáil leader Mícheál Martin about the blanket bank guarantee by the Fianna Fáil and Green Party coalition government on 30 September 2008, which shifted the debt of insolvent private banks onto Irish taxpayers: “We did it for the euro . . . We did it to prevent contagion across the euro zone.”

As a historian, Mr Martin would be aware of another act by Ireland as a small nation in the interests of a great-power enterprise. The price paid was of a different kind, but in both cases the action was not truly a self-determined one but rather that of a dependent.

On 20 September 1914, a little over a month after the outbreak of the First World War, John Redmond, leader of the Irish Party in the British House of Commons, made his call at Woodenbridge, Co. Wicklow, for Irishmen to fight for the British Empire “wherever the firing-line extends.”

Many answered his call, and nearly fifty thousand were killed.

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