Mick Wallace (Wexford, Independent) | Oireachtas source

Paying for Anglo Irish Bank's problems over a longer period rather than up-front is certainly a help. The Government says we are saving €20 billion over the next ten years but we should never have been paying €20 billion now or at any other time. Ashoka Mody, a former IMF economist who is now at Princeton University, argued this week that it is a pity "that the 'debtor' nations view their bargaining position as so weak that limited gains ... have been overly celebrated." He goes on to say "But not only was sovereign debt restructuring abandoned, governments were forced to assume debt they never signed on to. What is the principle that requires the Irish taxpayer to honour the debts of a rogue bank? The promissory notes deal must not be judged by the relief it provides to the Irish budget; the right benchmark for its achievement is the debt obligations that live on." The Government has admitted that it never even sought a debt write-down. That is not what the Irish people expected from it after the last election. The Labour Party's manifesto said "Labour believes that bank bondholders should share in bank losses." It also said "Labour will seek to ensure that burden sharing with bondholders is part of a renegotiated deal." Fine Gael boasted in its five-point plan that it was the first party to argue that it was unfair for the Irish people to shoulder all of the losses of our banks and that it was right that investors who had lent recklessly to the banks should also share in the pain. It added: "It is neither morally right nor economically sustainable for taxpayers to be asked to beggar themselves to make massive profits for speculators." It said: "Irish and other European taxpayers can no longer be expected to carry the can for reckless lending between Irish and other European banks. It is a basic rule of capitalism that if you lend recklessly you must take the consequences." God be with the day.

A study published today by Caritas Europa entitled The Impact of the European Crisis says that an entire generation of young people are faced with unemployment - 55% in Spain, over 50% in Greece and 30% in Ireland. It states that children are at greater risk of poverty or social exclusion than the rest of the population in 21 member states. The study strongly challenges current official suggestions that the worst of the economic crisis is over. The report highlights the extremely negative impact austerity policies have on the lives of vulnerable people and reveals that many others are being driven into poverty for the first time. The report's main conclusion is that austerity is not working and an alternative is needed.

Where do we go from here? Members are probably familiar with the journalist and economist at Cambridge University Ha-Joon Chang, who says: "[I]t is important to reiterate that the fiscal deficits in the European countries ... are largely due to the fall in tax revenues following the finance-induced recession, rather than to the rise in welfare spending." Maybe that is what the Minister for Social Protection, Deputy Joan Burton, was trying to tell the Minister for Tourism, Transport and Sport, Deputy Leo Varadkar, yesterday. He continues:

So, attacking the poor and eviscerating the welfare state is not going to cure the underlying cause of the deficits. ... [I]n the past three decades of dominance by free-market ideology, many of us have come to believe in the myth of the individual fully in charge of his/her destiny. ... The beauty of this worldview - for those who disproportionately benefit from the current system - is that, by reducing everything down to individuals, it draws people's attention away from the structural causes of poverty and inequality. It is well known that poor childhood nutrition, lack of learning stimulus at deprived homes, and sub-par schools restrict capability developments of poor children, diminishing their future prospects. When they grow up, they have to contend with all sorts of prejudices that constantly discourage and deflate them ...

What we have been looking at over the past while is a model of capitalism that has been forced down the throat of the world as the only way to run a modern economy at a cost of ballooning inequality and environmental degradation. It has been discredited and only rescued from collapse by the greatest State intervention in history.

The great twins of neo-conservatism and neo-liberalism have been tried and tested to destruction. For 30 years the West's elites insisted that only deregulated markets, privatisation and low taxes on the wealthy could deliver growth and prosperity. Neo-liberalism was handing power to unaccountable banks and corporations, fuelling poverty and social injustice, while all the time undermining democracy. Surely, we need to reconstruct our damaged economy and society in a more democratic, egalitarian and rational way. A sustainable alternative that would prioritise the concerns of ordinary people is possible. There is an alternative.

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