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27 May 2010 Edition

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The EU elephant in the room- Sinn Féin the only party to oppose EU-Greek bailout fiasco

Arthur Morgan and Aengus Ó Snodaigh both spoke against the Bill on Wednesday

Arthur Morgan and Aengus Ó Snodaigh both spoke against the Bill on Wednesday

Last week, the Euro Area Loan Facility Bill was pushed through the Dáil by Fianna Fáil, the Greens, Fine Gael and Labour. This Bill allows for Ireland’s participation in the EU ‘bail-out’ of Greece and for Ireland to forward €1.5 billion to the fund. This is the bail-out that will have huge debt and budgetary ramifications on Greece, based on a typical IMF slash and burn austerity package. Sinn Féin was the only party to oppose this Bill and to oppose the economic direction Europe wants to take in this crisis. It’s not the first time the party has stood alone in opposition to a school of economics that puts a small elite before the interests of a vast majority. Our policies in the 26 Counties, when Cowen, Ahern, McCreevy and Co were pushing a low tax, low public spending regime, were ridiculed by the government, the golden circle, as well as Fine Gael and Labour. Arthur Morgan and Aengus Ó Snodaigh both spoke against the Bill on Wednesday in powerful speeches that have been lauded by left-wing commentators. While Arthur explained how the bail-out was for bondholders, not Greek people, Aengus tackled the mounting speculation and facts about Greek’s military spend. At one point, Brian Lenihan’s comments on the Sinn Féin deputies’ contributions, entered the realm of the absurd. When discussing Greek military spend, he compared it to Britain’s and asked “what are a couple of frigates verses a Trident missile launcher?”
Again, Sinn Féin have marked themselves out as the only voice not afraid to take on the establishment and challenge the status quo. Very little coverage was given by the media to the contributions, so Sinn Féin members may not be aware of the stance being taken by the party in Leinster House and beyond. Below is a summary of the contributions made by both TDs.


Arthur Morgan

“Were this Bill intended to fund essential public services in Greece for its people, I would have no problem with it. Were it aimed at providing a stimulus package to working people in Greece to try to build their way out of the economic mess, again I would have no problem with it because helping neighbours was part of the culture in which I, in common with many other Members, was reared. That is not the purpose of this Bill. It is about bailing out international bondholders who are a very wealthy, elite group of people. This Bill is about the direct provision of funding to bondholders, the majority of which are German banks. If one opposes a bailout for bankers in Ireland, surely it similarly must be opposed at an international level? These bondholders operate within the market, which I always took to mean taking one’s chances. Why is no risk or chance left to bondholders? Why must taxpayers and poor people in such economies pick up the tab when the market goes wrong for these people?
“As I noted, this primarily affects German banks. I was disappointed with the analysis of this situation by the Labour Party and Fine Gael as Opposition parties and their failure to perceive that it is just as problematic to bail out German bankers and others as it is to bail out Irish bankers. There should not be an absolute guarantee for those in this wealthy club that ordinary people will carry the can for them at all times. This is completely unacceptable.
“The perfect example in this regard took place in this State in the 2010 budget last December when the wrong option was taken. The Government was faced with a number of options in respect of how to build our way out of this recession. It took the wrong option because it opted for fleecing public servants, cutting pensioners’ Christmas bonuses and all the rest that went with it instead of going the other way and building a stimulus package. It did so instead of introducing a wealth tax or borrowing money from the National Pensions Reserve Fund to kick-start the economy. Sinn Féin’s pre-budget submission, the Road to Recovery, outlined in a detailed and costed fashion how that option would work, and it is most unfortunate this did not happen.

Greece hamstrung
“It is demanded of Greece that its economy be hamstrung by pay cuts and job losses and that it should service a now increased level of debt. Reducing incomes while increasing debt only enhances the risk of default and, hence, yields will continue to rise and the international bondholders again will have a field day. A crucial yet completely ignored point from Standard & Poor’s, when downgrading Greek and Portuguese debt, was that the austerity measures have depressed activity and tax revenues. One should seek to generate additional incomes and try to ensure people have sufficient funds to stimulate the economy and keep economic activity going. It is known that slash and burn measures are counter-productive because when budget deficits consequently increase, the rate of interest and so on rises and Government debt becomes more expensive. This is crazy.
“The European Commission obviously is seeking to have a veto - I acknowledge it is called consultation at present but will, of course, end up as a veto - in respect of national budgets in the member states, which is completely wrong. Incidentally, Sinn Féin warned during the course of the Lisbon treaty debate that this is exactly what would happen.

Euro drop
“Members will have seen the substantial dip in the value of the euro but it certainly has not collapsed or anything like that. Arguably, a weaker euro constitutes a substantial economic advantage by virtue of the export opportunities it gives both to this State and throughout the eurozone. I acknowledge the European Central Bank has primary responsibility for the euro. It is most unfortunate that when evaluating from an Opposition perspective what is good for the Irish people and economy, Ireland’s economy is approached in one way, but when it comes to dealing with Greece and this bailout for international bondholders, a completely different approach is taken.
“One way to reduce the volume of financial transactions that are taking place as markets take advantage and attack the euro’s position is the introduction of a tax on such financial transfers. The Tobin tax, which has been mooted many times, proposes the levying of a marginal percentage of a cost on financial transactions, which would eliminate the benefit to spectators in attacking the euro. I do not understand the reason this is not a central part of debate and discussion throughout the eurozone. I have not heard it being mooted substantially since the onset of this crisis, which is most unfortunate as it is a simple, low-cost and effective measure to prevent speculators from attacking currencies and the euro in particular in the manner that obtains at present.”

Aengus Ó Snodaigh

“As a consequence of the vulture capitalism of recent weeks, and of the past year in particular, the Bill before the House intends, supposedly as a gesture of solidarity, to extend a loan to the Greek people of up to €1.5 billion, or a bond of some kind. Ultimately, the Greek people will have to foot this growing debt bill, which was not caused by the working people or the unemployed of Greece. It was created by an economy built on falsehoods, by tax avoidance on a rampant scale encouraged by the Government, and by tax exemptions which encouraged those in the shipping industry and major companies to benefit while the working people had to pay their share. The situation is similar to that of Ireland. Our Celtic tiger was built on a falsehood, a basket-case economy that was found out in recent times. In the case of Greece it is the same thing. Its economy was built on falsehood and shipping in the same way as ours was built on construction. When it collapsed it did so very heavily.
“The other problem with the Greek economy is that there was a cooking of the books, as is acknowledged by everybody. The system was set up to allow for that. Proceeds from the sale of shares traded on the Athens stock exchange had a tax exemption. Income from ships and shipping was tax exempt and dividends received from a Greek company was tax exempt. Capital gains from the sale of a business between family member was tax exempt.  
“This economy was a relatively poor and struggling one just as Ireland’s economy struggled for many years to try to build good standards of education, living and public services. Much was done in Ireland, as in Greece. The problem now is that the ordinary people of both countries have to pay twice for what they thought they had already paid.
“I offer an example of where some of the €1.5 billion we are offering and sending, in supposed solidarity with the Greek people, is going and what it will pay for. Not only will it pay for what my colleague, Deputy Morgan, mentioned, namely, the German bond holders but I have a list of some of the Greek military expenditure that has been ramped up in recent weeks. Just when the extent of the Greek economy’s problems came to light the people are being forced to spend more money than before on military spending. This country has the highest military spend in the entire EU. In a bizarre twist to the Greek crisis, France and Germany are pressing Greece to buy gunboats, war planes and submarines from them while at the same time they and the ECOFIN Ministers are telling the Greeks to curb public spending. They must, therefore, curb all spending except military spending. Some Greek officials say privately that the Paris and Berlin authorities are using the crisis as leverage to ensure that arms contracts which were negotiated in recent years and, in particular, in recent weeks, are concluded. As a result, the country will not reduce its military spend.
“An advisor to Prime Minister, George Papandreou, stated in a report, “Nobody is saying, ‘Buy our warships or we won’t bail you out’, but the clear implication is that they will be more supportive if we do what they want on the armaments front”. According to Nick Witney, a former head of the European Defence Agency, the Germans and the French have the Greeks over a barrel now. We must not forget it was this agency that our Government and so-called main Opposition parties persuaded the Irish people to buy into during the Lisbon treaty referendum. It is this company which is encouraging more spend on the armaments industry.

Military equipment
“The Greeks are concluding a deal with the French at the moment to buy six Fremm frigates. If Deputies want to know what these frigates cost the figure is €2.5 billion. There goes the Irish solidarity gesture in one moment.
“Perhaps 15 Puma search and rescue helicopters at €400 million will do. Or what about the submarine Greece is buying, which is ineffective and out of date? It has a huge cost and will facilitate further skulduggery on the part of multinationals. It is ridiculous that such a purchase is even being contemplated by a Government which must be bailed out.  
“The only solution to bond holders who gambled, as they did in this country and many others, is to stick it to them and say, “Sorry, hard luck, you are not getting your money. You will get it when we can afford it”. They speculated and gambled and that is the only realistic alternative. If bondholders are bailed out they are encouraged to continue their speculation. That is where the capitalist system has arrived. This type of vulture capitalism has been going after one currency after another. We saw this before the euro was created and we see it again now when speculators try to destroy the euro and economies and ensure they will take whatever penny, pound, euro, or whatever, out of the economies of the European Union.
“We have given away our sovereignty in recent treaties and cannot depend on or defend our economy. The vested interests will not allow us to do that. This Government, through this measure and others it is contemplating, now suggests we should give away further sovereignty so that other countries may have control over our budgetary process. They have that already, in many ways, under the Growth and Stability Pact. That is not good enough. If this country is to be sovereign it must stand up to the bondholders and should not facilitate them, in Greece or anywhere else.”
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