Trades Union Desk: Concede or repent
ICTU’s Macdara Doyle believes that IMF admissions of miscalculation give further grounds for dropping austerity.
Last month, Congress General Secretary David Begg said that he expected that henceforth members of the troika should don sackcloth and ashes, when visiting Ireland.
Mr Begg said that such a public display of contrition was necessary to atone for the serious damage that troika policies have inflicted on the Irish economy and society as a whole.
The public wearing of sackcloth dusted with ash is an old Hebrew tradition that signified contrition or remorse on the part of an individual who has done wrong and harmed others. And therein lies the problem: the troika, or at least key elements of that unholy trinity, does not do penitence, contrition or remorse. They do not even do humble. Their analysis is always correct, their prescriptions always perfect.
Just in case there was any doubt, our worst fears were confirmed recently when we heard the views of István Székely, the head of the European Commission’s team in Ireland as part of the ‘bail-out programme’.
According to media reports, Mr Székely blithely informed a conference of businesspeople that “the rich have taken the biggest hit in the recession.” So much so that Mr Székely now says that more needs to be done to spread the burden onto shoulders of low earners.
Not having heard any demands for a retraction, and safe in the knowledge that we are several months away from 1 April, we can only assume that Mr Székely’s comments were reported accurately. Frightening.
I wonder how big a hit Mr Székely thinks has been taken by the almost 450,000 people on the dole. Or the almost 360,000 people that have lost their jobs since the onset of the crisis in 2007? Or even the 50,000 plus forced abroad in search of work?
It would be interesting to hear how the Commission’s man in Dublin believes that they can be made to shoulder more of the burden, in order to give their wealthy compatriots some breathing space.
But the problem for the Commission and the troika generally is that they have had one leg of their ideological stool unceremoniously pulled from under them. This resulted from the candid admission by senior IMF figures in October that, whoops, they had got it all wrong. Having looked again at their original calculations in relation to the impact of austerity, they conceded that everything they had previously believed was wrong.
Explaining that the organisation has used the wrong ‘multipliers’, the IMF admitted that the true impact of austerity was several times worse than even they had expected. But at least they had the honesty to own up to the error of their ways. Their honesty should have their troika partners wriggling uncomfortably in the spotlight. After all, the original IMF projections on the impact of austerity measures provided the basis for the entire troika bail-out programme for Ireland, including key growth projections.
Thus, if the very figures and calculations that underpin the bail-out plan are flawed it follows that the plan itself will not run according to (their) expectations. That in turn might also help explain how the Irish Government can be found to have met fiscal target after fiscal target, but the one target that consistently keeps on the move is growth.
This in turn means that while we, at enormous social and political cost, have delivered on our side of the bargain, the troika has failed to deliver on its side. They’ve been selling the economic equivalent of snake oil and seem perplexed as to why the patient not only fails to recover, but grows visibly weaker before their eyes.
Time to change direction and plot a new course, for Ireland and for Europe. No economy in history has emerged from deep recession courtesy of austerity.
We need growth, hope and jobs, or else its sackcloth all round.
For more on the social compact for Europe visit www.etuc.org/a/10024
