Archive for May 5th, 2010

Ruairi Quinn: International Asshole

Essentially, the Irish state’s contribution to the Greek bailout is an expropriation of Irish workers in order to fill the coffers of the capitalist fighting fund for the sustained assault on the living standards of European working class populations, starting with the Greeks. As Martin Wolf points out in today’s Financial Times, the package is ‘overtly a rescue of Greece, but covertly a bail-out of banks

One of the key features of the neoliberal state, as David Harvey stresses in A Brief History of Neoliberalism and elsewhere, is unerring state support for financial institutions at the expense of the interests of the population. The declared ideological character of the political parties in government under such circumstances is of no real import. In fact, it probably makes more sense, from the point of view of finance capitalists, for a social democratic party to be in power when these exercises are conducted, since these are usually far more effective of quelling populist anger by sugarcoating the brutal shock therapy in unctious egalitarianism.

There is much talk of a surge in support for the Irish Labour party of late. The party leader is lobbying hard, following the Nick Clegg ‘phenomenon’ in the UK elections, for the inclusion of a third neoliberal-flavoured testicle in televised party leader debates.

It is not hard to imagine that they will be in government in the very near future. If this happens, the Irish economy will still be in deep crisis. It is natural to wonder what this party will do differently to the current coalition when in government.

With regard to the Greek situation, some are pointing to the ‘socialist’ character of the governing PASOK party, which is attempting to foist the EU-IMF package on the Greek population. Unlike some other countries in Western Europe, the name ‘socialist’ still retains a patina of radicalism in Ireland. The Irish Labour party let the word slip every now and again, as a tantalising hint of things to come.

Yet it does not take a great leap of the intellect to realise that the ‘socialism’ entailed here is most likely that of former Secretary General of NATO Javier Solana or current IMF head Dominique Strauss-Kahn: fervent support for EU-US imperialism, with the occasional nod in the direction of social democratic conventions.

I caught an excerpt of an interview with Ruairi Quinn on RTE News the other day. I reproduce a transcript of it here. It took me a long time because I had to keep cleaning puke off the keyboard.

It is revealing on a number of counts. Leaving aside the matter of Quinn’s minatory arrogance and quasi-racist characterisations, one is struck by how enthusiastically he stands shoulder-to-shoulder with the interests of finance capital and EU policy elites against the Greek trade unions. But he is to be credited for pointing to the existence of a ‘political Ireland’ that stands apart from the rest of the population, and to the broad consensus that holds with regard to dishing out punishment to ordinary people so that banks can prosper.

Quinn: ‘Well we’ll be borrowing it about 3 percent and we’ll be lending it on to the Greeks at 5pc. So in fact we’re going to make a bit of money out of this, and in fact that’s what’s happening with the other countries as well. But that 5% interest rate is much less than the 11pc that the international bond markets are demanding from the Greeks.

This is a tragedy in one respect in that the Greeks didn’t make the necessary adjustments before they joined the single currency. Statistically they misled the markets, basically, not to put a tooth in it (?) they told lies in the National Statistics Office sadly over successive governments but the government led by George Papandreou in my view, and I know the man personally, is very committed, and you’ve just heard his finance minister, economy minister speaking there. And significantly, despite all the difficulties, they are getting massive support from the Greek citizens right across the political spectrum. [HG: There is a general strike on in Greece today BTW]

Interviewer: It doesn’t appear that way when you see the level of protests that are happening on the streets of Greece and as the level of the cuts is going to be outlined to them over coming days and weeks it’s hard to imagine in a country which has never greeted any cuts like this with any level of enthusiasm nor would you expect them to that they would be able to buy in to the package that’s being offered to them.

Quinn: Well first and foremost there are over 10 million Greek citizens and nothing like that number has been out on the streets. The opinion polls are much more positive than the savage demonstrations would suggest. There is a far left anarchist movement within Greece. It’s a very divided society, they had a civil war immediately after the Second World War, and then the coup d’etat in 1967 which lasted until 1974 so it’s quite divided, and against that background I find the support that Papandreou and PASOK his political party have is quite extraordinary..the alternative for the Greeks, and they’re acutely aware of this, is to be ranked alongside Serbia, or alongside Macedonia, or other countries in that region, that have very weak economies. Some people have suggested that they should leave the Euro, but that would actually impoverish the Greeks and put a complete run on their banks.

Interviewer: Just to give people an idea of the kind of cuts that are being suggested in Greece, how do they compare to the kind of cuts we had to endure here.

Quinn: Because we moved so quickly, and while many of us disagreed with the nature of the cuts, there was no intellectual disagreement in political Ireland against the necessity for the macroeconomic measures. That agreement wasn’t there in Greece, and hasn’t been there for quite some time. I don’t have the absolute figures in relation to the cuts, but one of the things that they are going to do is the retirement age has been increased to 67 years of age.

Interviewer: From 55.

Quinn: From 55, which is a ridiculously low figure when you think of it. [HG – It is ridiculously low; see this Reuters article: Greece to keep retirement age at 65 – minister]

Also, the middle class self-employed in Greece pay little or no tax. Tax evasion and lying to the authorities is worse than it ever was in this country and we were pretty bad at it, as we saw..

Interviewer: And as anybody who has ever tried to get a receipt for any transaction in Greece will know from being on holidays there..

Quinn: Yes, absolutely. So this, look, the Greeks made a political decision in terms of joining the single currency, in terms of joining the European Union, that they wanted to get out from the Byzantine world in which they had been located, where poverty was endemic, Greek emigration was much higher than Ireland, the third largest Greek city in the world is Melbourne, and they made this conscious decision but they didn’t take all of the steps necessary. Now the Euro has imposed a new type of discipline on them. In the past, countries like Greece, Spain and Portugal, and Italy for that matter, when they got into trouble they’d devalue their currency, which seemed to be a short quick answer but in fact it just avoids dealing with the necessary problems. To give you an example, Gavin, when we joined the single currency, it was 2.4 deutschmarks for the Euro. It was something like 2000 lira in the Italian context to join the single currency which is an example of how countries like Spain, Greece and Portugal have devalued and devalued over the years. But it didn’t, in the medium to long term, solve their problems.

Interviewer: Nonetheless, there will be many countries asking themselves of late whether they were wise to join the Euro at the time given the lack of flexibility they now have with their own currency.

Quinn: No, the problem that we have, and particular with Minister McCreevy and the banks, that when we joined the single currency, and don’t forget that we avoided all the problems of currency speculation and fluctuation and interest rates. There was no stability in the financial markets. Business people couldn’t plan for the future because within the space of producing a product and signing a contract and delivering the cash for payment on it, your profit could be wiped out because of interest rate and currency fluctuations.

The single currency has its benefits, but it also has its obligations, and as somebody said to me that, when we joined under Fianna Fáil, even though I had helped to negotiate it, but it was during Charlie McCreevy’s time, that instead of learning to behave like Germans we continued to act like Italians, or should I say Greeks. And that discipline has to be learnt.

Interviewer: Ruairi Quinn, Former Finance Minister and Labour Party TD, thank you for joining us today.

What a dirtbird.

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May 2010
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