Joe Higgins (Dublin West, Socialist Party)

The European Financial Stability Facility was a measure designed, not in the public interest as is claimed in the Title to the Bill, but really fundamentally to salvage the European banks and major European speculators from the consequences of their reckless lending over the previous ten years. Members are aware they gambled wildly on property bubbles in Spain and Ireland. Moreover, many European financial institutions were involved in the schemes that were built up around the sub-prime mortgage industry in the United States and accrued toxic debts to levels that are still unknown but which I have no doubt are being carefully covered up at present.

Last July, in a panic response to a fear that Greece might be forced to default on its borrowings, the EU leaders concocted this further extension to the European Financial Stability Mechanism. In essence it provided for the borrowing of masses of money in the financial markets, which was to be lent to the peripheral countries in crisis. The ordinary people of those countries were then to be bled dry to meet the payments demanded by the banks, hedge fund operators and the various speculators. Surely it should be clear to the Government and even to its backbenchers that this policy is a spectacular failure. Three years of austerity in Greece and in Ireland have yielded a dismal failure with an enormously increased crisis. All that austerity is doing, that is, the savaging of the living standards and services of the working class people who are the vast majority in society, is to pile up further crises.

Moreover, austerity is a policy that is increasingly discredited. As the left pointed out from the beginning, when one cuts in this manner the funds going into the pockets of members of that section of society with low or middle incomes who will spend virtually everything they receive, then of course one cuts drastically their ability to purchase goods and services, which therefore gives rise to the dreadful crisis we face at present that has resulted in tragic levels of unemployment. If only the Government were to listen to some of the voices that increasingly are being raised both from the left and even from right-wing commentators and analysts. For example, the United Nations Conference on Trade and Development, which is led by a former leader of the World Trade Organization and who therefore is hardly a left-winger, excoriates the policy of austerity that is being driven by the European Union and the European Central Bank at present. It counsels governments to not take the advice of the very institutions, it names rating agencies, the prescriptions and actions of which got the world and Europe into this incredible present crisis.

Even one pillar of the so-called troika of the EU, ECB and IMF that is driving austerity down the throats of the Irish people with the collaboration of the Irish Government is in reality discrediting that policy. It appears to be schizophrenic in that it insists in Ireland and Greece that the mass of the population should take savage cuts in their living standards but yesterday warned the United States and other major economies, for which one should read the European Union, against fiscal tightening for fear it would cause further global fiscal crisis. What is fiscal tightening except cutting the amount of funds that are going to working people, to services, into capital investment and so forth? There is now a body of opinion that challenges the policy that is being driven by the EU and ECB to which the Irish Government has capitulated and which manifestly is a dreadful failure.

The eurozone is in a crisis that will continue. By common consent it is almost inevitable that Greece will be unable to repay these draconian debts. As Deputy Clare Daly illustrated, the Greek working class and poor are being further impoverished and driven into an impossible position. However, as economic development has been shattered in Greece, how therefore can they generate the wealth to pay off such massive levels of debt? It is absolutely impossible. Moreover, default by Greece will result in a new banking crisis that will have draconian effects on the European and world economies. The problem is the governments of the eurozone and the European Union lack the necessary cohesion to have a solution. They will not find a solution on the basis of the crazed market system. Moreover, the national interests of the national capitalist establishments within the European Union are coming to the fore and will increasingly so do as tensions rise in the future and they will not agree on fundamental lines of argument they hope might improve the position. While we rely on the market system in which private banks, hedge fund operators and so forth dictate policy and interest rates and dictate to entire economies, there will be only further chaos and crisis. Therefore,for the Opposition Members who seek an alternative, such an alternative is clear. Capitalism and the financial market system are utter chaotic failures and therefore revolutionary changes in the financial system are needed. We need a socialist alternative. We need these major institutions to be brought into public ownership under democratic control and accountability. They should then be directed to act for the common good, for major public investment in infrastructure, for example, services and the like, that would be capable of recreating the crashed economies of the European periphery and many other countries in the EU that are suffering from crises to one degree or another.

We will see increasing mobilisation of the working people of Europe, pensioners, poor and youth over the next short few years in opposition to a system that is drowning them in its crisis . If we had a trade union leadership in Europe or this country that was worth anything, it certainly would not have gone this far. Working people need to reclaim their trade unions and use them as fighting organisations. They will have no option but to do that over the next few years because otherwise the situation will evolve from this crisis to another that is worse.

See this speech in context