Irish Elections and Austerity

Irish Voters to Grade Austerity

Dispatches From The Edge

Conn Hallinan

Feb. 17, 2016

 

What looked like a smooth path to electoral victory for the Irish government has suddenly turned rocky, and the Fine Gael-Labour coalition is scrambling to keep its majority in the 166-seat Dail. A series of missteps by Fine Gael’s Taoiseach [prime minister] Enda Kenney, and a sharply critical report of the 2008 Irish “bailout,” has introduced an element of volatility into the Feb. 26 vote that may end in a victory by an interesting, if fragile, coalition of leftists and independents.

 

The center-right Fine Gael and center-left Labour Party currently hold 99 seats, but few observers see them maintaining their majority. Fine Gael has dropped from 30 percent several months ago to 26 percent today, and Labour is only polling at 9 percent. That will not translate into enough seats to control the Dail, and putting together a ruling coalition will be tricky, particularly when polls indicate that the independent bloc that has picked up 3 percent and is now the number one vote getter. In general, the independents are left or left-leaning.

 

The country is in the middle of an economic “boom,” but that is a relative term. Ireland is still reeling from years of European Central Bank (ECB) and International Monetary Fund (IMF) imposed austerity that doubled the rate of childhood poverty and saddled working people with onerous taxes, painful rate hikes and high unemployment. Wages have fallen 15 percent. Since 2008, almost 500,000 Irish—the majority of them young and educated—have emigrated from the country in search of jobs.

 

The government’s trouble began in December, when torrential rains swamped parts of the country and Kenny slow response to the disaster angered rural voters. Flood victims blamed the government for failing to invest in flood control, an infrastructure improvement that fell victim to the austerity regime.

 

Then the Fine Gael-Labour coalition was hit with a double whammy: a report by in-house auditors for the European Union and an Irish parliamentary study of the collapse of Irish banks from 2008 to 2010. The EU study found that the European Central Bank (ECB) had pressured the Irish government not to impose losses on “senior bondholders” and, instead, put the burden on taxpayers. According to the parliamentary study, the ECB threatened to withdraw emergency support for Irish banks—thus crashing the economy—if wealthy bondholders were forced to take losses. All of this came as news to most of the Irish.

 

The center-right Fianna Fail Party was in power when the great crash came in 2008, a crash that had nothing to do with government spending or debt, but was instead, the result of real estate speculation by banks and financial institutions. Irish land values jumped 800 percent, which should have warned the banks that a bubble was inflating. But the bondholders, speculators and banks did nothing because they were making enormous amounts of money. When the bubble popped, Irish taxpayers were forced to pick up the $67 billion tab.

 

Fianna Fail was crushed in the 2011 election, losing two-thirds of their deputies, and Fine Gael-Labour took over.

 

Part of the government’s problem is that for the past five years it has been saying that it had no choice but to enforce the savage austerity regime of the ECB, but it is now trying to take credit for the recent improvement of the economy.

 

The coalition’s mantra has been “stay the course”, good times are ahead. The term the government is using is “fiscal space,” or the estimated amount of money that will be available for investment if Ireland continued its economic recovery. According to Fine Gael that figure would be $12 billion between 2017 and 2021.

 

First, no one understood “fiscal space,” a term used by the IMF. Even Deputy Prime Minister Joan Burton, a Labour Party leader, called it “a new kind of ‘F’ word” and said voters hadn’t a clue what it meant. Asked to define it, Kenny said the Irish voters wouldn’t understand it, a statement that managed to insult everyone. The government subsequently knocked the figure down to $10 billion, and the opposition said it was more like $8 billion.

 

And while Fine Gael is taking credit for the economy, critics are pointing out that it wasn’t austerity, but a fall in world oil prices and a decline in the value of the euro that favors Ireland’s export industry, that got the economy going.

 

Finally Kenny muffed a question about whether Fine Gael might consider a coalition with Fianna Fail because the Labour Party was dropping in the polls and might not hold its 33 seats. This enraged Labour, and Kenny had to mend fences and pledge that Fine Gael would never go into a government with Fianna Fail.

 

In short, the government is looking inept, and it is taking fire for its shift from “we had no choice in applying the austerity” to “we take all the credit for the current situation.” Fintan O’Toole, the sharp-tongued columnist for the Irish Times and author of “Ship Of Fools,” chronicling the financial greed that led to the 2008 meltdown, wrote of the government, “If you had no power, you can claim no credit; if you did have power, you have to account for how unjustly you used it.”

 

Behind the cover of “It’s not our fault,” the government cut funds for caregivers, threw people off of National Health, cut support for the disabled, support for education, and did nothing about rising homelessness. As O’Toole points out, the improvements in the economy were because of oil prices, low interest rates and the falling euro, all “entirely outside the control of the Irish government.”

 

In any case, the country is still deeply in debt and, while the jobless rate is no longer 15 percent, it is still just below 10 percent.

 

The Dail is a motley affair, with a host of small parties and a bloc of independents. Currently Fine Gael has 66 seats and Labour 33. The center-right Fianna Fail (that inched up slightly in recent polls) has 21, and the leftist Sinn Fein has 14. The latter dropped three points in the poll from 20 percent to 17 percent. Other left parties include the Social Democrats, the Anti-Austerity Party, and there is a mix of mainly leftists in the independent bloc. The centrist Greens are showing some growth, as is the small rightist Renva Party.

 

Right now various stripes of the left hold 41 seats, a figure that is likely to go up in the coming elections. To control the Dail requires 80 seats, but if the independents do well, Sinn Fein holds its own, and Labour jumps ship, an anti-austerity coalition is possible.

 

In the end it may be a hung parliament, with no bloc of parties able to cobble together an effective government. Kenny may double cross Labour and join with Fianna Fail. But whoever takes over, the policies of austerity have been deeply discredited during this election and anyone who tries to “stay the course” is in for stormy weather.

 

—30—

 

 

 

 

 

 

 

 

Europe’s Left: Triumph or Trap?

 

Foreign Policy In Focus

Conn Hallinan

Feb. 12, 2016

 

 

Over the past year, left and center-left parties have taken control of two European countries and hold the balance of power in a third. Elections in Greece, Portugal and Spain saw rightwing parties take a beating and tens of millions of voters reject the economic austerity policies of the European Union (EU).

 

But what can these left parties accomplish? Can they really roll back regressive taxes and restore funding for education, health and social services? Can they bypass austerity programs to jump start economies weighted down by staggering jobless numbers? Or are they trapped in a game with loaded dice and marked cards?

 

And, for that matter, who is the left? Socialist and social democratic parties in France and Germany have not lifted a finger to support left led anti-austerity campaigns in Greece, Spain, Ireland, or Portugal, and many of them helped institute—or went along with—neoliberal policies they now say they oppose. Established socialist parties all over Europe tend to campaign from the left, but govern from the center.

 

Last year’s electoral earthquakes were triggered not by the traditional socialist parties—those parties did poorly in Greece, Spain and Portugal—but by activist left parties, like Syriza in Greece, Podemos in Spain, and the Left Bloc in Portugal.

 

With the exception of Ireland’s Sinn Fein, all of these parties were either birthed by, or became prominent during, the financial meltdown of 2008 that plunged Europe into economic crisis. Podemos came directly out of the massive plaza demonstrations by the “Indignados” [the “Indignant Ones”] in Spain’s major cities in 2011.

 

Syriza and the Left Bloc predated the 2011 uprising, but they were politically marginal until the EU instituted a draconian austerity program that generated massive unemployment, homelessness, poverty, and economic inequality.

 

Resistance to the austerity policies of the “Troika”—the European Commission, the European Central bank, and the International Monetary Fund—vaulted these left parties from the periphery to the center. Syriza became the largest party in Greece and assumed power in 2015. Podemos was the only left party that gained votes in the recent Spanish election, and it holds the balance of power in the formation of a new government. And the Left Bloc, along with the Communist/Green Alliance, has formed a coalition government with Portugal’s Socialist Workers Party.

 

But with success has come headaches.

 

Syriza won the Greek elections on a platform of resisting the Troika’s austerity policies, only to have to swallow more of them. In Portugal the Left Bloc and Communist/Green Alliance are unhappy with the Socialist Party’s commitment to re-pay Portugal’s quite unpayable debt. Podemos proposed a united front with the Socialist Party, only to find there are some in that organization who would rather bed down with Spain’s rightwing Popular Party than break bread with Podemos.

 

Lessons learned?

 

It is still too early to draw any firm conclusions about what the 2015 earthquake accomplished—and Ireland’s election has yet to happen—but there are some obvious lessons.

 

First, austerity is unpopular. As Italy’s prime minister, Matteo Renzi, put it after the Spanish election, “Governments which apply rigid austerity measures are destined to lose their majorities.”

 

Second, if you are a small economy taking the power of capital head on is likely to get you trampled. The Troika did not just force Syriza to institute more austerity, it made it more onerous, a not very subtle message to voters in Portugal and Spain. But people in both countries didn’t buy it, in large part because after four years of misery their economies are still not back to where they were in 2008.

 

The Troika can crush Greece—Portugal as well—but Spain is another matter. It is the 14th largest economy in the world and the fifth largest in the EU. And now Italy—the fourth largest economy in the EU—is growing increasingly restive with the tight budget policies of the EU that have kept the jobless rate high.

 

But can these anti-austerity coalitions force the Troika to back off?

 

A major part of the problem is the EU itself, and in particular, the eurozone, the 19 countries that use the euro as a common currency. The euro is controlled by the European Central Bank, which, in practice, means Germany. In an economic crisis most countries manipulate their currencies—the U.S., Britain, and China come to mind—as part of a strategy to pay down debt and re-start their economies. The members of the eurozone do not have that power.

 

Germany pursues policies that favor its industrial, export-driven economy, but that model is nothing like the economies of Greece, Portugal, Spain, or even Italy. Nor are any of those countries likely to reproduce the German model, because they do not have the resources (or history) to do so.

 

Complicating matters are political divisions among the Troika’s left opponents. For instance, Syriza is under attack from its left flank for not exiting the eurozone. Former Syriza chief economic advisor Jannis Milios charges that Syriza has abandoned its activist roots and become simply a political party more interested in power than principles. There are similar tensions in Spain and Portugal.

 

But the choices of what to do are not obvious,

 

Withdrawing from the eurozone can be perilous. In Greece’s case, the European Central Bank threatened to shut off the country’s money supply, making it almost impossible for Athens to pay for food, medical and energy imports, or finance its own exports. In short, economic collapse and possible social chaos.

 

But following the policies of the Troika sentences countries to permanent debt, rising poverty rates, and a growing wealth gap. Portugal has one of the highest inequality rates in Europe, and Spain’s national unemployment rate is 21 percent, and double that among the young. Greece’s figures are far higher.

 

The left coalitions are far from powerless, however. Portugal’s coalition government just introduced a budget that will lift the minimum wage, reverse public sector wage cuts, rollback many tax increases, halt privatization of education and transport, and put more money into schools and medical care. Which doesn’t mean everything is smooth sailing. The coalition has already fallen out over a bank bailout, and it disagrees on the debt, but so far the parties are still working together. Jeremy Corbyn, the newly elected left leader of the British Labour Party, hails the Portugal alliance as the beginning of an “anti-austerity coalition” across the continent.

 

There are also interesting developments going on in Spain that address the tensions between street activism and political parties. Emily Achtenberg, a long-time housing expert from Boston and a reporter/analyst for NACLA, has studied Barcelona’s “Platform of People Affected by Mortgages” (PAH). PAH came out of Spain’s catastrophic housing crisis brought on by the financial meltdown of 2008. Some 650,000 homes are in foreclosure, and 400,000 families have been evicted.

 

 

With the help of Podemos, progressive activists won control of the big cities of Madrid, Barcelona, Cadiz, and Zaragoza. Ada Colau, the mayor of Barcelona, is a founder of PAH

 

In Spain, homeowners are responsible for debts even after declaring bankruptcy, debts that can block them from renting an apartment, buying a home or purchasing a car.

 

At the same time, according to the 2013 census, 34 million homes and apartments—14 percent of the country’s housing stock—are vacant, most owned by banks. And since the city has become one of Europe’s tourist magnets, “tens of thousands of once-affordable apartments are marketed to tourists through on-line platforms like Airbnb,” says Achtenberg, exacerbating the situation. But PAH and its allies on the city council have slowed down the evictions, cracked down on unlicensed Airbnb owners, and leaned on the banks to free vacant homes and apartments.

 

PAH now has some 200 chapters all over the country and is planning to press the national parliament to end the “debt for life” law. While allied with Podemos, PAH has maintained its political independence, working both sides of the street: sit-ins and protests, and running for office.

 

“A perennial question,” says Achtenberg, “is whether the impetus for progressive change comes from inside the institution, or from the streets. In Barcelona today, it seems that both strategies are needed, and are working.” As Colau says, for progressive movements “both are indispensible. For real democracy to exist, there should always be an organized citizenry keeping an eye on government—no matter who is in charge.”

 

Putting people in apartments and raising minimum wages does not overthrow capitalism, but many activists argue that such victories are essential for convincing people that change is possible and that the Troika is not all-powerful. They also play to the left’s strong suit: building a humanistic society.

 

Finding that fine line between change and co-optation is not easy, and one formula does not fit all circumstances. Spain has more breathing room than Portugal and Greece simply because it is bigger. The Portuguese may find their path a bit easier simply because they have allies in the eurozone. As Greek Prime Minister Alexis Tsipras says, “I think it is not so easy to change Europe when you are alone.”

 

In the end the path may be like that old peace song: “If two and two and 50 make a million, we’ll see that day come ‘round.”

Hillary and the Urn of Ashes

Hillary & The Urn of Ashes

Dispatches From The Edge

Conn Hallinan

Jan.30, 2016

 

“They sent forth men to battle.

                           But no such men return;

                           And home, to claim their

                                   welcome.

Comes ashes in an urn.”

Ode from “Agamemnon”

in the Greek tragedy

the Oresteia by Aeschylus

 

Aeschylus—who had actually fought at Marathon in 490 BC, the battle that defeated the first Persian invasion of Greece—had few illusions about the consequences of war. His ode is one that the candidates for the U.S. presidency might consider, though one doubts that many of them would think to find wisdom in a 2,500 year-old Greek play.

 

And that, in itself, is a tragedy.

 

Historical blindness has been much on display in the run-up to the Iowa and New Hampshire primaries. On the Republican side candidates were going to “kick ass” in Iraq, make the “sand glow” in Syria, and face down the Russians in Europe. But while the Democratic aspirants were more measured, there is a pervasive ideology than binds together all but cranks like Ron Paul: America has the right, indeed, the duty to order the world’s affairs.

 

This peculiar view of the role of the U.S. takes on a certain messianic quality in candidates like Hillary Clinton, who routinely quotes former Secretary of State Madeline Albright’s line about America as “the indispensible nation” whose job is to lead the world.

 

At a recent rally in Indianola, Iowa, Clinton said that “Senator [Bernie] Sanders doesn’t talk much about foreign policy, and, when he does, it raises concerns because sometimes it can sound like he really hasn’t thought things through.”

 

The former Secretary of State was certainly correct. Foreign policy for Sanders is pretty much an afterthought to his signature issues of economic inequality and a national health care system. But the implication of her comment is that she has thought things through. If she has, it is not evident in her biography, Hard Choices, or in her campaign speeches.

 

Hard Choices covers her years as Secretary of State and seemingly unconsciously tracks a litany of American foreign policy disasters: Afghanistan, Iraq, Libya, Syria, Georgia, Ukraine, and the “Asia pivot” that has dangerously increased tensions with China. At the heart of Hard Choices is the ideology of “American exceptionalism,” which for Clinton means the right of the U.S. to intervene in other countries. As historian Jackson Lears, in the London Review of Books, puts it, Hard Choices “tries to construct a coherent rationale for an interventionist foreign policy and to justify it with reference to her own decisions as Secretary of State. The rationale is rickety: the evidence unconvincing.”

 

Clinton is undoubtedly an intelligent person, but her book is remarkably shallow and quite the opposite of “thoughtful.” The one act on her part for which she shows any regret is her vote to invade Iraq. But even here she quickly moves on, never really examining how it is that the U.S. has the right to invade and overthrow a sovereign government. For Clinton, Iraq was only a “mistake” because it came out badly.

 

She also demonstrates an inability to see other people’s point of view. Thus the Russians are aggressively attempting to re-establish their old Soviet sphere of influence rather than reacting to the steady march of NATO eastwards. The fact that the U.S. violated promises by the first Bush administration not to move NATO “one inch east” if the Soviets withdrew their forces from Eastern Europe is irrelevant.

 

She doesn’t seem to get that a country that has been invaded three times since 1815 and lost tens of millions of people might be a tad paranoid about its borders. There is no mention of the roles of U.S. intelligence agencies, organizations like the National Endowment for Democracy, and of openly fascist Ukranian groups played in the coup against the elected government of Ukraine.

 

Clinton takes credit for the Obama administration’s “Asia Pivot” that “sent a message to Asia and the world that America was back in its traditional leadership role in Asia,” but she doesn’t consider how this might be interpreted in Beijing. The U.S. never left Asia—the Pacific basin has long been our major trading partner—so, to the Chinese, “back” and “pivot” means that the U.S. plans to beef up its military in the region and construct an anti-China alliance system. It has done both.

 

Clinton costumes military intervention in the philosophy of “responsibility to protect,” or “R2P,” but her application is selective. She takes credit for overthrowing Muammar Gaddafi in Libya, but in her campaign speeches she has not said a word about the horrendous bombing campaign being waged by Saudi Arabia in Yemen. She cites R2P for why the U.S. should overthrow Bashar al-Assad in Syria, but is silent about Saudi Arabia’s intervention in Bahrain to crush demands for democracy by its majority Shiite population.

 

Clinton, along with Samantha Power, U.S. Ambassador to the UN, and Susan Rice, the Obama administration’s National Security Advisor, has pushed for muscular interventions without thinking—or caring—about the consequences

 

And those consequences have been dire..

 

Afghanistan: Somewhere around 220,000 Afghans have died since the 2001 U.S. invasion, and millions of others are refugees. The U.S. and its allies have suffered close to 2,500 dead and more than 20,000 wounded, and the war is far from over. The cost: close to $700 billion, not counting the long-term medical bill that could run as high as $2 trillion.

 

Libya: Some 30,000 people died and another 50,000 were wounded in the intervention and civil war. Hundreds of thousands have been turned into refugees. The cost was cheap: $1.1 billion, but it has created a tsunami of refugees and the war continues. It also produced one of Clinton’s more tasteless remarks. Referring to Gaddafi, she said, “We came, we saw, he died.” The Libyan leader was executed by having a bayonet rammed up his rectum.

 

Ukraine: The death toll is above 8,000, some 18,000 have been wounded, and several cities in the eastern part of the country have been heavily damaged. The fighting has tapered off although tensions remain high.

 

Yemen: Over 6,000 people have been killed, another 27,000 wounded, and, according to the UN, most of them are civilians. Ten million Yeminis don’t have enough to eat, and 13 million have no access to clean water. Yemen is highly dependent on imported food, but a U.S.-Saudi blockade has choked off most imports. The war is ongoing.

 

Iraq: Somewhere between 400,000 to over 1 million people have died from war-related causes since the 2003 invasion. Over 2 million have fled the country and another 2 million are internally displaced. The cost: close to $1 trillion, but it may rise to $4 trillion once all the long-term medical costs are added in. The war is ongoing.

 

Syria: Over 250,000 have died in the war, and four million Syrians are refugees. The country’s major cities have been ravaged. The war is ongoing.

 

There are other countries—like Somalia—that one could add to the butcher bill. Then there are the countries that reaped the fallout from the collapse of Libya. Weapons looted after the fall of Gaddafi largely fuel the wars in Mali, Niger, and the Central African Republic.

 

And how does one calculate the cost of the Asia Pivot, not only for the U.S., but for the allies we are recruiting to confront China? Since the “Pivot” took place prior to China’s recent assertiveness in the South China Sea, is the current climate of tension in the Pacific basin a result of Chinese aggression, or U.S. provocation?

 

Hillary Clinton is not the only Democrat who thinks American exceptionalism gives the U.S. the right to intervene in other countries. That point of view it is pretty much bi-partisan. And while Sanders voted against the Iraq war and criticizes Clinton as too willing to intervene, the Vermont senator backed the Yugoslavia and Afghan interventions. The former re-ignited the Cold War, and the latter is playing out like a Rudyard Kipling novel.

 

In all fairness, Sanders did say, “I worry that Secretary Clinton is too much into regime change and a bit too aggressive without knowing what the unintended consequences may be.”

 

Would Hillary be more inclined toward an aggressive foreign policy? Certainly more than Obama’s—Clinton pressed the White House to directly intervene in Syria and was far more hard line on Iran. More than the Republicans? It’s hard to say, because most of them sound like they have gone off their meds. For instance, a number of GOP candidates pledge to cancel the nuclear agreement with Iran, and, while Clinton wanted to drive a harder bargain than the White House did, in the end she supported it.

 

However, she did say she is proud to call Iranians “enemies,” and attacked Sanders for his remark that the U.S. might find common ground with Iran on defeating the Islamic State. Sanders then backed off and said he didn’t think it was possible to improve relations with Teheran in the near future.

 

The danger of Clinton’s view of America’s role in the world is that it is old fashioned imperial behavior wrapped in the humanitarian rationale of R2P and thus more acceptable than the “make the sands glow” atavism of most the Republicans. In the end, however, R2P is just death and destruction in a different packaging.

 

Aeschylus got that: “For War’s a banker, flesh his gold.”

 

                           —30—