Tuesday, November 23, 2010

Irish Government Agrees on Bank Bailout Then Collapses: Condoms After the Fact

After Ireland agreed to a bank bailout, its government will dissolve. The coalition government collapsed on accusations that the Irish sovereignty has been lost and that in the end foreign banks banks will be bailed out by Irish taxpayers.

The dissolution after agreeing to the bailout, which indeed raises many questions. How can they agree to something for the long term and then collapse the government? The situation in Ireland is very volatile.

From the Irish Times comes htis commentary today:

HAVING AN election after agreeing a four-year deal that will shape all key decisions is like debating which brand of condom to buy after you’ve become pregnant. It is a parody of democratic choice. Popular sovereignty has almost no meaning in Ireland right now. Its restoration is the precondition for a meaningful election.
We need a non-party technical administration to hold the fort while the people have their say on the four-year plan and on radical reform of our political system. Within that space, we need to make a collective decision on the International Monetary Fund-European Union deal.

The primary goal of the IMF-EU package to which any new government will be committed is not to stop Ireland spiralling downwards into economic depression. It is to ensure that Irish citizens cough up yet more money for the banks.

The process of converting bank debt into national debt is to be completed. Instead of the banks borrowing money from the European Central Bank at one per cent interest to fund their operations, the State (you and me) will borrow it for them at perhaps five per cent.
To pay for this, the poor and the vulnerable will be further hammered.

Welfare will be slashed, public health services will deteriorate, children, the disabled and the elderly will lose the already inadequate services that afford them some hope and dignity. But the €100 billion that is owed by the Irish to German banks and the €109 billion owed to British banks will be secured.

The consequences are entirely predictable. Mass unemployment and mass emigration will be locked in to an economy that, beyond the multinational sector, will not grow.

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