Yes, after availing of the EU/IMF Stability Fund and paying a modest 5% rate of interest on the €110b in funding required to stabilise the country's finances, the IMF and the EU have insisted on the following austerity measures:
*Reduce the budget deficit from 13.6% to 3% by 2014
*Pay freeze on all public sector employees
*Scrapping the annual bonus scheme (basically a 20% bonus on wages)
*Increase in the retirement age from the current one of 62
*Full pension rights increased from minimum 37 to 40 years service
*Pensions to reflect average rather than final salary in the public sector
*VAT from 21% to 23%, increases to alcohol, cigarettes and fuel taxation
*Taxing of illegal construcion
*Privatisation of various state and semi-state bodies
Above we can see what the dreaded IMF will insist on just to provide Greece with the funding required to keep the nation afloat. Scary eh? Not really is it?
Let's be clear, regardless of our banking crisis and our incompetent governance, we are not Greece, not by a long way. Firstly we never lied about our balance of payments, we are a genuine open market economy, we have a generous corporate rate of tax, we have a language that everyone understands and we don't rely on tourism as an exclusive means to wealth.
So if we were to avail of the solidarity fund, how much worse would it be compared to the austerity measures that we have put in place and are going to put in place? Not a lot based on the evidence above.
But in the meantime, let's just destroy what's left of our economy while we pretend that the markets will allow us a sub-5% yield and that we can actually manage to get our deficit to 3% by 2014....
Wednesday, October 27, 2010
Tuesday, October 26, 2010
2011 and the Death of the Gombeen Princes
With the GE of 2011 we will finally see the end of a particular plague in Irish politics. The nature of our democratic process always lends itself to a coalition government, and the 2+1 nature of previous governments has had the added affliction of having independents and pseudo-independents all extracting their pound of flesh in order to support the status quo. But it's not as simple as that. The independent gombeen princes can only garner so much in favour and kind but retain their seats on the backbenches. Their power is limited compared to the real princes, who, because of their ability to top the local polls and bring in one or more TD's based on their surplus and preferences, have sought and maintained a ministry role within government and then used their influences at national level to bring favour to their local constituency.
And so since the early 1980's we have had a cyclical scenario in Irish politics where, thanks to the withdrawal of local taxation - which reinforced the reduction in the perceived role of councillors against TD's - we had a situation where people voted on local issues rather than national ones, nothing new I understand, but now a perception grew that by voting for independents and certain politicians, the constituents would gain in terms of employment, access to services, and improvement to those services and infrastructure. And this became self-prophesying. What was the point in voting for a national candidate when a local driven candidate could offer so much more in terms of payback? Thus we have 30 years where the local and parastatal nature of Irish politics and semi-state bodies has only increased their relevence and importance.
In order to bring this to a natural conclusion, we also have to pay attention to the other topic that has ruined our political landscape and that is the nature of legacy politics.
Roughly speaking, and paying little attention to offending sensibilities, legacy politics is literally dying on its feet. The idea of voting for a political party purely for family reasons is an anachronistic trapping from the past. By and large it benefits only two parties, FF and FG. A generalisation and perhaps a truism, is that these voters are both rural and aged. We have already seen how the rural/urban divide is striking in terms of how the respective voters vote. It's FF/FG in the rural areas and Labour/FG in the urban ones. The significance however, is that as this century continues along, populations continue to cluster towards the cities and away from these legacy strongholds. Furthermore, the forthcoming decade of stagnation will further increase the legacy flight by means of emigration to urban and foreign destination.
And so in 2011, we will have a coalition government with a comparative enormous majority over the opposition. FF, Green, SF and Independent TD's will be completely irrelevant in terms of importance in local and indeed national politics, The Irish electorate are no fools in terms of electing self-serving politicians. What is the point in electing these TD's if they are in no position to action on the promises whispered in bars, funerals and houses of their constituents? We will, after a very long time, finally have a government with a full mandate to govern on national issues only, with a sufficient majority to see things through, and a genuine opportunity to bring about genuine political reform.
It is at this point that we reach the unknown. Strategists in Labour and FG will be spending quite a lot if time cogitating on their most important task, and that is, remaining in power and a further reduction in FF's power-base. And therein lies the rub. Unless the forthcoming coalition engenders genuine political reform by doing away with the local parastatal nature of Irish politics, promoting local government to its proper place and installing a list system, we risk the possibility of returning to this awful spectre within 5 years. This cannot happen again. The unbelievable circumstances that have arisen to allow this change occur - and the price we are paying for it - must not be wasted. It is imperative that Labour and FG launch their campaigns on a joint platform of wide-reaching reform. This opportunity can only come about in the best of times and the worst of times.
And so since the early 1980's we have had a cyclical scenario in Irish politics where, thanks to the withdrawal of local taxation - which reinforced the reduction in the perceived role of councillors against TD's - we had a situation where people voted on local issues rather than national ones, nothing new I understand, but now a perception grew that by voting for independents and certain politicians, the constituents would gain in terms of employment, access to services, and improvement to those services and infrastructure. And this became self-prophesying. What was the point in voting for a national candidate when a local driven candidate could offer so much more in terms of payback? Thus we have 30 years where the local and parastatal nature of Irish politics and semi-state bodies has only increased their relevence and importance.
In order to bring this to a natural conclusion, we also have to pay attention to the other topic that has ruined our political landscape and that is the nature of legacy politics.
Roughly speaking, and paying little attention to offending sensibilities, legacy politics is literally dying on its feet. The idea of voting for a political party purely for family reasons is an anachronistic trapping from the past. By and large it benefits only two parties, FF and FG. A generalisation and perhaps a truism, is that these voters are both rural and aged. We have already seen how the rural/urban divide is striking in terms of how the respective voters vote. It's FF/FG in the rural areas and Labour/FG in the urban ones. The significance however, is that as this century continues along, populations continue to cluster towards the cities and away from these legacy strongholds. Furthermore, the forthcoming decade of stagnation will further increase the legacy flight by means of emigration to urban and foreign destination.
And so in 2011, we will have a coalition government with a comparative enormous majority over the opposition. FF, Green, SF and Independent TD's will be completely irrelevant in terms of importance in local and indeed national politics, The Irish electorate are no fools in terms of electing self-serving politicians. What is the point in electing these TD's if they are in no position to action on the promises whispered in bars, funerals and houses of their constituents? We will, after a very long time, finally have a government with a full mandate to govern on national issues only, with a sufficient majority to see things through, and a genuine opportunity to bring about genuine political reform.
It is at this point that we reach the unknown. Strategists in Labour and FG will be spending quite a lot if time cogitating on their most important task, and that is, remaining in power and a further reduction in FF's power-base. And therein lies the rub. Unless the forthcoming coalition engenders genuine political reform by doing away with the local parastatal nature of Irish politics, promoting local government to its proper place and installing a list system, we risk the possibility of returning to this awful spectre within 5 years. This cannot happen again. The unbelievable circumstances that have arisen to allow this change occur - and the price we are paying for it - must not be wasted. It is imperative that Labour and FG launch their campaigns on a joint platform of wide-reaching reform. This opportunity can only come about in the best of times and the worst of times.
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