Revealed - more cuts to pay for bank bailout planned


Within hours of announcing that the real cost of the Anglo bailout was going to be 30 billion plus rather than the 1.5 billion first estimated the government was revealing its plan for further cuts in our pay welfare, and public services to pay for this. The bank bailouts, not totalling 45 billion, will push the budget deficit to 32% of GDP, the government has the intention of continuing to attack the living standards of workers in Ireland until this is reduced to the 3% required by the EU.

Minister for Finance Brian Lenihan refused to reveal yet just what new forms his planned attack on us will take but did say that "in order to fully underline the strength of our resolve and to ensure the necessary fiscal adjustment we will make an additional significant consolidation effort in 2011 over and above the already announced target." He refused to spell out what this would mean in terms of children losing eduction, sick people dying when they could be cured and workers seeing their pay and conditions being cut.

In the case of Anglo 20 billion of the loans transferred to NAMA were accounted for by just 20 developers as part of the huge gamble they took in the last years of the property bubble. The banks made huge profits in that period, the biggest three making 15 billion in profits in the last three years of the bubble. Now all of us are going to pay the costs of the failed gamble of the wealthy 1% of Irish society who hold 34% of the wealth. As well as loss of jobs, pay, healthcare and education some 300,000 famlies now face negative equity and the danger of losing their homes.

It has also been revealed that in order to continue to bailout Allied Irish Bank the government shareholding may rise as high as 90%, in effect nationalizing the bank. As a consequence a couple of the senior management are to step down, at the height of the bubble the top management were taking home 70-90 thousand euro every week, 250 times the minimum wage.

Workers in the banking sector itself are amongst those hit by the cuts with 3,000 losing their jobs at AIB and Bank of Ireland over the last year and their union, the IBOA, warning 10,000 jobs could be lost in the sector. Some of these bank workers had been sold the idea that the boom was for them too, one Irish Nationwide worker revealed to the Irish Independent that his ex-boss Fingleton who walked away with a 27 million pension "was constantly promising there would be a golden egg for everyone while he was paying us buttons." The WSM has argued that this is typical of the boom, the wealthy 1% took the huge profits that were being made but now expect the rest of us to shoulder their losses.

The governments plans for further attacks on workers in Ireland was backed up by IMF trained Central Bank governor Patrick Honohan who told the Irish Times that the newly revealed cost of bailing out the banks "confirm the need for a reprogramming of the budgetary profile." Honohan's salary is unknown but the previous governor earned 370,000 a year, over 20 times the minimum wage. He also got a free car. Honohan has argued for a "sizable increase" in tax on the low paid.

Workers found themselves under attack from a third source this morning, IBEC the 1%'s lobbying organisation demanded a pay freeze until 2013 and revealed that 13% of private sector companies had cut basic pay last year while 7 in 10 had frozen pay. IBEC, representing the richest 1% is unsurprisingly not concerned with the welfare of the rest of us, it is just worried about 'the economy'. Jack O'Connor, President of SIPTU and ICTU seemed to accept IBEC's logic when he limited his challenge to their demand to suggesting that IBEC's policy might be counterproductive and saying that a "much more subtle approach is required." This will not calm the growing disquiet at the rank and file level of the unions with a leadership that seems to have so accepted the logic of partnership that it is unwilling to fight to defend the pay and conditions of workers outside of that logic.