Mar 01 2014

LATVIA AND IRELAND IN THE RACE TO THE BOTTOM

There has been much talk recently from George Osborne about economic recovery in the UK, demonstrated in a rise in employment figures. That many of these jobs are on zero hours or other part-time contracts, and that the largest group dependent now on benefits are  the low paid jobs, highlights the reality of life in ‘Food Bank Britain’. 

Similar claims of recovery have been made by EU spokespeople with regard to Latvia and Ireland. The following two articles from the current Socialist Democracy (Ireland) bulletin show what such ‘recovery’ means for the working class.

 

1. LATVIA – ENDPOINT IN THE RACE TO THE BOTTOM?

Scavenging for scraps on the street of Riga in Latvia

Scavenging for scraps on the street of Riga in Latvia

Ireland is not alone in receiving the accolade of Forbes magazine. Latvia also receives glowing praise and, as with Ireland, the IMF’s enthusiasm is based upon growth figures.

However Latvia’s growth of 4% in 2012-13 follows a withering shrinkage of 20% in the economy, from its 2007 peak, and still leaves the economy years away from the point it was at seven years ago.

Latvian emigration is shocking, even worse than Ireland, with the Latvian population now at the level it was in 1957, leaving some small cities semi deserted. It is the high level of emigration that ‘flatters’ the unemployment figures which are down to around 11.9% from a peak of 20.5%. The impact on the youth is particularly bad. Even though it is predominantly young people who are emigrating, the youth unemployment figure is still at almost 25%.

The aggressive austerity drive is to save the banks, in this case mostly Scandinavian owned, has seen public salaries being cut by between 25% and 40%, drawing praise from Jorg Asmussen, of the ECB. Such a cost means nothing to the corporate and political elite and gives heart to the IMF.

In fact the declining population is cited as a positive in the country’s successful accession to the Eurozone. Never mind that Latvian working class people are forced to emigrate to earn enough to pay the mortgages they took out during the boom, or that school children no longer have a local school to attend after ‘scores’ of schools were closed.

Ireland and Latvia are seen as being comparable examples because of their economic similarities. They both have a relatively small domestic economy in relation to international money flows. In other words international finance capital flows through both countries, producing favourable growth figures but leaving little trace of this fabulous wealth on the local working populations who are picking up the bills for the banks losses. Indeed Latvia’s similarities with Ireland are outstanding, but it has little to do with any conscious ‘willingness’ on the part of working people to repay the bankers debts and more to do with poverty, emigration and a lack of a political fight back.

Latvian teachers protesting against cuts in their pay

Latvian teachers protesting against cuts in their pay

 This article was first posted at:-

http://www.socialistdemocracy.org/Bulletins/SDBulletinFeb2014LatviaEndPointInTheRaceToTheBottom.html

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2. IRELAND’S NEW ‘INDEPENDENCE’  – AN AVALANCHE OF CORRUPTION

Protest against the Troika on Dublin's Halfpenny Bridge

Protest against the Troika on Dublin’s Halfpenny Bridge

 The Irish exit from the bailout, an “exit” that involves decades of austerity and the continued supervision of the Troika and European Central bank, was met immediately by the rich smell of corruption arising from the Irish gombeen capitalists.

One element of the aroma, involving charities, pointed back-wards and assured us that crony capitalism and a bloodsucking parasitism on the Irish working class had survived unchanged throughout the crisis. Another element, from the new Irish water company, looked forward to the endless opportunities for graft in the modernisation and privatisation programmes now being implemented. In the background was the persistent smell of police corruption.

Much has been done to convince us that inflated secret payments to charity CEOs were examples of bad practice in an isolated sector. In fact, in the case of the Central Remedial Clinic, where millions raised by parents of handicapped children went into the pension pot of the CEO, there were three elements operating that are illustrative of Irish society.

Class hatred

The confessional nature of the Irish state meant that many state functions were hived off to religious organizations and charities. State money was provided without any real transparency and as a result a culture of corruption, impunity and of abuse of the poor grew up.

The tradition of crony capitalism meant that appointments to these boards involved an informal network where one hand washed the other, with pay and perks decided by your golfing partners.

One of the ways class hatred has expressed itself during the bank bailout is that the capitalist cronies have been immune from any hardship and overwhelming blows have fallen on the very poorest, with a mass withdrawal of services from children with handicaps and those with learning difficulties.

The new crop of scandals involving the onslaught of privatisations began with hidden payments of over 100 thousand in consultancy fees paid before the new water company had been fully established.

Arrogance

Rather than this causing any embarrassment, a chief economic advisor to the government has counterattacked with the claim that €2 billions of efficiency savings have been lost because the legal fiction of a new company offered the opportunity for mass sackings. It was not the fat cats who were the criminals, but the thousands of workers who had spent their lives in the water industry.

In the case of the garda, it is over a year since allegations were made that an informal system allowed superintendents to tear up thousands of traffic tickets for those with political pull. There was no response. There was also no response to a complaint from Socialist TD Clare Daly, one of the TDs who put forward the allegations that the garda had tried to frame her on drink-drive charge.

Now a year later, with whistleblowers emerging inside the police, the garda commissioner arrogantly questioned the right of TDs on the public accounts committee to question him and was immediately supported by the minister of justice.

What is astounding about the avalanche of corruption is that there is little response. The logic here is the logic of class struggle. Attempts to construct a working class opposition have failed. A left unity project has collapsed in disorder, with the fragments scrabbling for election around a reformist programme. Labour are in government and the trade union bureaucracy in partnership with capital.

Irish capital has learnt nothing and understood nothing. Their role as agents of imperialism is to plunder Ireland and impoverish the working class. Building a movement based on the needs of the working class, taking the first steps to build a revolutionary party, these are urgent tasks that can no longer be avoided.

Clare Daly, Socialist TD targeted by garda

Clare Daly, Socialist TD targeted by garda

 

This article was first posted at:

http://www.socialistdemocracy.org/Bulletins/SDBulletinFeb2014IrelandsNewIndependence.html

 

 

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