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Sunday, April 3, 2011

Labours way or Frankfurt’s way – I guess its Frankfurt’s then

One of the most crucial issues in the recent election campaign was the banking crisis and its effect on the economy, our public finances and the people of this state. Austerity budgets, cutbacks, higher taxes and job losses are all a direct result of a flawed banking strategy that saw hundreds of Billions of taxpayer’s money put into the black hole of Anglo and other stricken banks. This disaster is undoubtedly the primary reason for the collapse of the Fianna Fáil vote.

The contrary position adopted by Fine Gael and Labour of wanting to see ‘burden sharing’ and of ‘not one more cent’ undoubtedly won seats for both these parties. Almost six weeks on from the election and the manifestos of the Government parties are being consigned to history as little more than mere pre-election promises.

The Labour Party’s pre-election stance was clear and unambiguous – it is Labours way or Frankfurt’s way. With the announcement of €24 billion more of taxpayers’ money going into the banks to pay back in full investors and speculators it is clear that the Frankfurt way has prevailed. The Irish taxpayer has again been shafted to protect German, French and British banks. Most of the €24 billion the state will put into the banks will be borrowed money. This makes it worse as our national debt is spiralling out of control.

One simple fundamental economic truth seems to evade our politicians. They don’t seem to realise that the more blank cheques they write to shore up the European banking system, the more they are burdening us with future taxes. This burden causes the economy to contract more. Writing cheques to bail out Europe’s banks won’t help anyone, apart from the creditors of the banks – who should suffer anyway. What we are witnessing is the new Government embracing the failed policies of the past.

The choice for the Irish state is clear: we need to impose aggressive burden sharing on un-guaranteed bonds. We need to go after bondholders. While the focus of the Government and the EU has been on banking stress tests, not one person in Brussels or in the Cabinet has had recourse to a stress test for the wider economy or for hard-pressed working people in this state, the unemployed and those on social welfare. While election promises are broken and speculators and investors are refunded in full, all of those families struggling to cope will be asked to pay more. We are being let down once again.

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