Southern Ireland: End of the Miracle - Now the attack on the working class begins

In Southern Ireland, the economic miracle is well and truly over. As we have predicted and explained for some time now, the Celtic Tiger phenomenon, did not mean that capitalism had solved any of its contradictions. On the contrary the boom in the south was based on an increased intensification of the exploitation of labour through a series of so-called social partnership deals, and a heavy reliance on the world market. As the world market dips into recession and drags the southern economy along with it the bosses intend to turn the screw even tighter on the working class in an attempt to maintain their profits.

In our previous article on the Celtic Tiger economy we explained how the share of capital had risen at the expense of the working class over the last decade, specifically how profits had grown in direct relation with an attack on workers' wages and hours. That process has continued unabated over the last twelve months. There has been no respite in capitalism's efforts to squeeze more profits out of our labour; in the context of a declining world market the only road open to the bosses to protect their profits will be a further assault on workers living standards and working conditions. That is the real meaning of "Sustaining Progress", more accurately titled Sustaining Profits - the latest social partnership deal to be put to the unions by the government and the employers.

In 2000, Gross National Product grew by 8.7%; but the estimate for 2002 is just 1.2%! Such a dramatic downturn in the economy is bound to have a profound effect on all aspects of Irish society. The sharpest expression of these changes has been seen already in the steep decline in the government's finances. As a result, Fianna Fáil and the Progressive Democrats have launched a series of attacks on the working class through cutbacks and proposals for widespread privatisation in the public sector. In short the government has embarked on a new offensive against the working class.

The myth of social partnership

Ahern and his government appear to be full of confidence. They are taking comfort from the fact that the official opposition are ineffectual and in a shambles. The government also believes that they have the measure of other opposition forces, i.e. the trade unions. The leadership of the unions are as keen as ever to sign up to yet more disastrous social partnership. However, the government will be making a big mistake indeed if they confuse the leaders of the unions with the mood and outlook of the rank and file. Beneath the calm exterior of the leadership's class collaboration is a burning discontent on the poart of workers being asked to sacrifice once again in the interests of the bosses' profits.

The government are moving swiftly to implement these attacks in order to take advantage of the weak opposition and delude themselves that they will be able to recover from any political fall out in time to fight the next election against the backdrop of a recovering economy. That is a pipedream. At the same time, Bertie Ahern and Mary Harney have no real understanding of the depth of the anger and disgust that has accumulated beneath the outwardly calm surface of Irish society. The list of their proposed attacks on wages and public services reads like a serious threat to workers all over Ireland. At the same time, their offensive is not only on the economic front, they are also moving to restrict democratic and political rights in a number of very important areas and enhance the autocratic powers of the state.

Harney has proposed new restrictions on immigration. Her claim that restricting work permits will defend Irish jobs is laughable. The ruling from the Supreme Court denying immigrant or refugee families who have an Irish born child the automatic right of residency, is a significant weapon that the establishment will use in the future. In the context of an economic crisis, the establishment parties will use the divide and rule tactic, perfected in Ireland over generations, to scapegoat immigrants for rising unemployment and public spending cuts - the real blame for which lies at the door of the crisis of the profit system.

In February, the Garda Special Forces were deployed on the streets of Limerick and the army was sent into Shannon Airport. These two events tell us a great deal about the intentions of the ruling class in the next period. The feud between rival gangs in Limerick and the so-called "dangers" posed by the incidents at Shannon Airport are now being used by the government to excuse these unprecedented measures.

The Irish Army is now in effect protecting the transfer of US troops to the Gulf for the war against Iraq! While it is very unlikely that the state will try to repress the anti war movement yet, these developments are part of a trend by the state over the last couple of years to take a more repressive approach to workers and political activists. They are also proposing new restrictions on the Freedom of Information Act.

The weakness of the government

These attacks on democracy, and the use of the armed forces are not, as one might think at first sight, indications that this is a strong government confidently moving forward. The reality is the opposite. They are actually in a very weak position. At this stage, they are able to get away with their attacks, above all because of the lack of a strong political alternative, which represents working class people. However, the change in the economic situation, and in a more immediate sense the war on Iraq, is already creating the conditions in which all that could be changed.

The Irish economy is in a very weak position. Gross Domestic Product, the value of all goods and services produced in Ireland may have grown by 5% - 6% in 2002, however, the Gross National Product (GNP) grew by just 1.2%. This is a more important indicator of the situation because it takes into account money transferred into and out of the country. Given that the multinational corporations repatriate a huge amount of profits, this figure provides us with a truer picture of the wealth in the country. The latest figures from the Central Statistics Office show that GNP for the third quarter of last year actually declined compared to the same quarter in 2001. If that trend continues it would mean that the domestically owned economy had slipped into recession, which would be a dramatic change after years of substantial growth. This would mainly indicate the decline in the key markets to which Irish companies export, international overcapacity and overproduction which is at the core of capitalism's crisis. It also reflects the increasing cost of Irish exports due to the increase in the value of the euro. The single currency has not proved to be the panacea that was claimed.

Ireland has not been immune to the growth in credit, which has fuelled the continuation of the boom in the last period. Consumer spending and the continuing growth in credit for mortgages are playing an important role in the economy. However, both of these would be cut across quickly if there were a sustained loss in jobs. The number of job losses has been growing consistently over the last twelve months. Given the state of the world economy, and especially with the US sliding into a new recession, this is likely to intensify over the next year with profound consequences for the Irish economy and Irish society.

This is the background against which the new social partnership deal must be analysed. Even if Sustaining Progress is endorsed, the limited, and mean pay rises proposed would place an ailing economy under pressure. The bosses will try to go back on it at the earliest opportunity. A 7% pay rise over 18 months in the private sector is below inflation and will only be accepted by the majority of workers reluctantly. Nevertheless the bosses will now be claiming that they cannot afford even this measly increase.

In addition, the deal contains binding arbitration in order to attempt to curtail the ability of workers to force employers to pay up. In the new economic recession that is developing, social partnership - which served to prevent workers struggling for a decent share of increased wealth during the boom - will not be able to prevent workers taking action to defend jobs, wages and working conditions.

Apparently knowing no shame, the leadership of the Irish Congress of Trade Unions (ICTU) decided to ballot its affiliates on the new social partnership agreement, "Sustaining Progress", without giving any recommendation. This is generally known as leading from the rear. For several years now they have presented each new agreement with the government and the employers as a triumph for their negotiating skills, and for the concept of social partnership. However in reality this policy has amounted to nothing new at all, simply old fashioned class collaboration, whereby workers were given a few crumbs from the ever-expanding cake of the capitalist's wealth.

When ICTU entered the latest partnership talks, its stated agenda among other things included union recognition, and above inflation pay increases. What have they achieved? The bosses' organisation, IBEC, spell out the truth in a newsletter to its members, " there is no change in the principle of trade union recognition: no company can be forced to statutorily recognise a union".

The pay rises on offer, headlined at 7 percent, will, in reality, fall below inflation, and rather than the promised phased catching up of public sector wages, the "deal" represents a wholesale attack on the wages and conditions of workers in the public sector. The "progress" which the government and the bosses wish to "sustain" includes more work for teachers, performance management systems to prepare the ground for performance related pay, and procedures to prevent health workers from striking.

The most disturbing aspect of the new deal however is the proposal to introduce binding arbitration. The deal states that the vast majority of industrial relations issues will now be subject to binding arbitration. In the private sector, the Labour Court and in the public sector an ad-hoc arbitration board will issue recommendations on industrial relations issues. This procedure effectively blocks any trade union from taking industrial action to further their members' interests.

If the trade union leaders explained this to the rank and file the anger they already feel at having been cheated for the last decade could be turned into effective militant action to defeat these attacks. Social partnership has once again failed to deliver anything for workers. It is and always has been a social con trick. Even if this new deal is passed it won't mean an easy ride for the government and their social partners at the head of ICTU. The new economic climate will see an assault on jobs; wages, working conditions and union rights and workers will organise to defend themselves.

The main political parties are now focused on the local elections due in the summer of 2004. Most of them are assuming that there will not be a general election before then. However, that is a pretty big assumption, a lot can happen before then. Above all the anger that has built up over the years of the "Celtic Tiger" must burst through the surface sooner or later and a series of struggles by workers could fundamentally undermine this government, who have a weak base of support and an early election could be forced upon them. For all the efforts of the trade union leaders to prevent it, the next period in Ireland will see an explosion of the class struggle, on the industrial and the political front.

No to Sustaining Progress (more accurately titled Sustaining Profits)
No pay freeze in the public sector
No to Compulsory arbitration - defend the right to strike
No to the Social con trick. For militant action to defend jobs, wages and trade union rights,
For a Socialist United Ireland linked by a voluntary federation to a socialist Britain and a Socialist United States of Europe.