The Irish bailout and the necessity for the United Socialist States of Europe

[Joanne98]

The bailout of Ireland by the European Union and the International Monetary Fund makes clear that society confronts a disaster if the international banks are allowed to continue their plundering of national treasuries and dismantling of social welfare systems built up over decades.

The financial rescue package has exposed the role of every European institution and national government as the servant of a global financial aristocracy. Not a single government, nor a single parliamentary party is either willing or able to check the ever-expanding power of international finance capital.

In May of this year, following a concerted campaign by major banks and rating agencies to downgrade Greek debt and drive up the price of Greek government bonds, the EU and the IMF intervened to arrange a €110 billion bailout of the country. Tax payers were assured by European politicians and the media that Greece was a unique case and there would be no similar bailout of another country.

Now, barely six months later, a comparable sum, ultimately to be repaid by the tax payers, has been allocated by the EU and IMF following another destructive campaign by international bankers and speculators to downgrade Ireland.

Having secured hundreds of billions from national governments to cover their bad gambling debts, the financial plutocrats are now dictating the terms of the most punitive austerity programs to be imposed in the history of post-war Europe. The details of the Irish budget are to be announced today, but the cuts to jobs, living standards and welfare rights dictated to the government by the banks will be unprecedented. One European Commission source described the austerity measures being drawn up for Ireland as the “Oliver Cromwell package,” a reference to the English lord protector whose army ravaged Ireland in a brutal campaign of re-conquest in 1649.

The financial elite take no hostages and are not prepared to accept even the most meager measures aimed at reining in their profits. Top bankers reacted with fury when the German government, backed by France, made the timid proposal a few weeks ago that the banks and major creditors shoulder some of the costs of a future bailout. The chairman of Deutsche Bank denounced the German plan and undertook a European-wide tour of board rooms and political institutions aimed at torpedoing the proposal.

The German government beat a hasty retreat and declared that any requirement for payments by the banks would be put off until 2013 at the earliest. There are no provisions in this week’s bailout of Ireland for the banks or big bondholders to suffer any losses.

With their latest international offensive, the banks have upped the ante. Not content with retrospective bailouts, they are demanding that governments set aside huge new funds to underwrite a new round of financial speculation.

Commenting on this process, the Frankfurter Allgemeine Sonntagszeitung noted: “The financial crisis has come round to where it all started: the banks. And they have grown cheekier. While Lehman had to go bust to prove the need for tax payers to bail out banks, potential crises are now to be ‘preempted’ by EU taxpayers. Thus the banks will not be held liable for the risk—to cover which they charge abundant interest—that a calamity will occur and a major debtor will default.”

Having ravaged the economies of Greece and Ireland, the financial mafia is moving on to new pastures. With the ink barely dry on the Ireland deal, the markets have stepped up pressure on the bonds of their next likely victims—Portugal and Spain.

http://www.wsws.org/articles/2010/nov2010/pers-n24.shtml