Brian Hughes looks at Martin McGuinness’ decision to contest the southern Irish presidential election. More updates on Irish politics can be found at Socialist Democracy’s site.
The decision by Sinn Fein to nominate Martin McGuinness as a candidate for the Irish presidential election has left the ‘liberal’ Dublin intelligentsia in a state of apoplexy.
Their attitude is one of ‘how dare this Northern nationalist think that he is fit to be president’? The Southern media then row in with lots of stories about McGuinness’s role in the IRA.
The ‘liberal’ commentator Fintan O’Tooole says he is an unsuitable candidate and should face possible war crimes charges. Whilst this shows us that this partitionist mentality is alive and thriving, the real story is ignored. Sinn Fein decided to throw their hat in the ring once Fianna Fail announced that that they would not be standing in the election.
Gerry Adams and Co aim to replace FF as the dominant nationalist party and they see McGuinness’s nomination as advancing this position. Workers feeling the brunt of austerity attacks should be depressed by this development as McGuinness will advance no fightback politics in his campaign.
Sinn Fein are trying to win an election for a ceremonial post and will put forward a populist programme appealing to all and sundry to vote for smiling Martin. The politics of Sinn Fein are moving to the right at a rapid pace and this election campaign will bear this out. It follows hard on the heels of Sinn Fein arguing in the South for opposition to the IMF/ECB offensive and accepting Tory cuts in the North. They have also led calls in the partitionist Stormont Assembly for corporation tax to be slashed, whilst ignoring how the low corporation tax in the Republic has been a disaster for the South’s economy and the living standards of workers.
Sinn Fein’s Jim Gibney, writing in the Irish News on September 22, boasts that Martin McGuinness "will give hope to the half a million unemployed, those emigrating and those taxed to the hilt to pay for the bankers’ spending, lending and borrowing spree".
How a man who rang the bell with arch bigot Ian Paisley at the New York capitalist Stock Exchange in 2007 and said that he would meet Britain’s Queen Elizabeth if elected would offer hope to workers is beyond me. Irish workers do not need a re-run of Fianna Fail part two. They need their own party and real class warriors.
Irish economy – light at the end of the tunnel?
There is a growing optimism within ruling circles in Ire-and that the worst of the crisis is over and that the country is on the road to recovery. This has been boosted by the recent revision of the terms of the EU/IMF bailout and the release of figures indicating strengthening economic growth (GDP expanded by 1.6% in the second quarter of the year, a rise of 2.3 per cent on the same period in 2010). These developments prompted one government minister to declare that he was starting to see “light at the end of the tunnel”. However, when we examine the data more closely we fine that the grounds for such optimism are rather tenuous.
For a start, the revisions to the bailout, a reduction in the interest rate by two per cent and an extension of the loan period from seven to fifteen years, does nothing to reduce the overall burden of the debt. Indeed, under the new terms Ireland could actually pay more, with more being extracted over a longer period of time. In the short term the lower interest rate will reduce annual repayments by around €600 million. This sounds a lot but because of the size of the debt will only mean a reduction in annual interest payments from €10 billion to about €9.4 billion.
Despite revisions the terms of the bailout are still impossible to satisfy. That they were revised was a recognition that the original terms would have resulted in a default occurring much sooner. While the new terms are just as draconian they delay default and allow creditors to extract as much as they can from Ireland in the intervening period. The debt agreement also leaves open the possibility of a second bailout.
Two speed economy
While the Irish economy has grown in the past two quarters, heralding a technical end to an almost four year long recession, what growth there has been is largely accounted for by exports (growing by over 6 per cent this year) and is also largely concentrated within the foreign owned manufacturing sector. Such export lead growth has given rise to the belief that the country can “trade its way” out of recession. But as long as multi-nationals drive exports they will have a limited impact on the domestic economy. It will also do little to improve state finances given the low level of corporation tax. There are also indications that growth in this sector is starting to ease, with the latest NCB Purchasing Managers’ Index for the manufacturing sector showing a fall for the second month running. This is linked to the slowdown in the world economy and the general fall in manufacturing activity. All this serves to highlight the two-speed nature of the Irish economy and the degree to which it is dependent on international developments.
The domestic side of the economy continues to stagnate. So alongside positive the GDP figures we have data covering the same period which indicates that personal consumption declined by 2.4 per cent; net government expenditure fell by 3.3 per cent; and investment was down by a huge 14.4 per cent. Other negative indicators include the unemployment rate (forecast to rise to almost 14 per cent), with 31,000 fewer people employed in 2011 than in 2010; the growing number of insolvencies; and falling retail sales.
Another factor weighing on the Irish economy is the on-going banking crisis. Despite various once and for all solutions it has not yet been resolved. Irish banks continue to post losses and hold massive liabilities. The high level of mortgage indebtedness, with 90,000 mortgages (11 per cent of the total market) in arrears or having to be restructured, could be a trigger for another crisis within the banking sector. This has the potential to raise losses in the banks to €100bn, with the knock on effect (given the state’s support for the banks) of increasing Irish state debt to €250bn. Of course, the financial crisis is not apart from the rest of the economy – the continuing stagnation of the domestic economy, manifested in high unemployment, declining incomes and the fall in property values, feeds into it.
What is also feeding into the weakness of the domestic economy is the on-going programme of austerity that has seen deep cuts in public spending and increases in charges and taxes. This is to continue into the foreseeable future with the government set to unveil a further four-year programme of austerity that will have at its heart the privatisation of public services and assets. The government has also indicated that its budget in December will be even more draconian than planned, with cuts likely to exceed the €3.6bn already announced. So amidst the claims that things are getting better, for many Irish people things are bad and about to get worse. While this may appear to be contradictory what it actually highlights is the class nature of the policies being pursued by the Irish Government and the EU. These have more to do with making the working class pay for the crisis than reviving the economy (indeed austerity and debt have served to dampen economic growth). This is the measurement of success for the ruling class. The recovery they envisage is one that rises on the back of a decimated working class and a reversal of many of the social gains made over the last fifty years.