Union role in dealing with crisis defended
IRISH CONGRESS of Trade Unions general secretary David Begg has rejected criticism that unions failed to organise mass protests against the Government’s handling of the financial crisis.
“Irish people are not the same as French people,” he said. “Irish people are much more conservative. Social democracy has never taken root in Ireland.”
He said “most Irish workers would not thank me for creating havoc in Ireland as they would see it.”
It was “absolutely important for any trade union movement, if it purports to lead social movements, to align itself as far as it can with what the people of the country are willing to do.”
He said if trade unions pushed “what is perceived by the population to be a narrow class interest beyond what is good for the whole population, what you will create is a fascist backlash”.
They were engaged in “innovative ways of trying to get a message to Government that people are not happy with this direction without necessarily doing it in any destructive sense”.
Responding to criticism from the floor at a conference in Croke Park organised by social policy think tank Tasc, Mr Begg said that they campaigned for a “better, fairer way of approaching” the crisis with a 2017 target to reach a 3 per cent deficit. There were also “three major demonstrations, involving about 120,000 people on the street on each occasion”.
The problem “up to now was that almost all options were foreclosed on except this kind of four-year austerity plan”. He said “it has taken a long time to build on that but we have built to the point now where there is a debate in society about two alternatives”.
This was why the Taoiseach responded in The Irish Timeson Saturday, “because he feels it is necessary to answer the question of why the four-year programme is the only available option”. But what was “most disturbing” was Government saying “well we have to start it like this anyway, and sure if it goes wrong maybe we can change”. He warned, however, that Irish citizens were confronted with “an austerity plan which is nasty, mean, brutish and short” and to stick to this course was “not only economically dangerous but politically unwise”.
In his speech at the Croke Park conference, Mr Begg said Germany’s “deficit hawks” would have no moral authority in imposing a financial solution on Ireland that the EU’s two largest countries “tore up” earlier this decade.
For all practical purposes the growth and stability pact “disappeared in a puff of smoke” in 2003 “when it became clear that neither France nor Germany was willing to accept the rule that they should be fined for running budget deficits larger than 3 per cent of GDP”. He also said “monetary policy is decided by the European Central Bank, but fiscal policy is decided nationally. That is the factual current position no matter how anybody tries to construct it that the Europeans have an armlock on us.”
Columbia University professor Stephany Griffith-Jones told the conference that Ireland and Greece should have been disciplined for their economic policy errors during the boom but “now is the time to provide more space for these countries”.
A specialist in international finance, she said “we have to retransform the financial sector and it can be done”.
Regulation was one of the solutions and needed “quite simple rules . . . why do people think it so difficult and complex? Because the complexity actually serves the needs of the people in the financial sector because it increases their profits but it doesn’t serve the needs of the real economy”.
Prof Griffith-Jones, financial markets director for the Initiative for Policy Dialogue at Columbia University, said: “What has happened is that the markets are conditioning, determining almost, what policies you need to follow and they are the wrong policies.”
People “talk about the markets almost as if they are an act of God, an act of nature. But in fact they are human constructs.”
Chairwoman of the European Parliament’s employment and social affairs committee Pervenche Berès sharply criticised the credit ratings agencies and said it was “unacceptable that only three major credit ratings agencies, that failed to do their jobs correctly and properly assess risk at the start of the crisis, continue today to rule the roost on financial markets”.
The new EU securities and markets authority, which comes into force in January, will directly supervise ratings agencies to control the rules they apply, “prevent any conflict of interest and apply strong sanctions”. A French socialist, Ms Berès is co-ordinator of the temporary financial, economic and social crisis committee, which proposed the creation of an independent credit ratings agency.