Monthly Archives For February 2013

Selections from Finance Dublin Magazine, 1988

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These scanned pages are intended as an aid to research into the world of finance in Ireland. I’m going to try to post as much of the primary and secondary source material I come across as I can. The purpose here is purely educational.

Some quotes, just to give a sense of the articles below.

First, from Ray Douglas, group general manager, Treasury, of Allied Irish Banks, talking about Dublin’s biggest dealing room (January 1988, pp.37-38):


The commissioning of our new 80-position dealing room is Bankcentre is only the latest step in a long association between Allied Irish Bank and the global financial markets. In the mid-1970s AIB identified the emerging global financial markets as a major business opportunity for the bank… Our objective is to make AIB a significant niche player in the markets, trading on our own account, providing liquidity to the markets and acting as market maker in some specific areas…
During the 1980s the emergence of the new global financial markets in securities and in off-balance sheet instruments such as SWAPS* and FRAs** has provided a further range of opportunities for AIB.

**Forward Rate Agreement

Ireland had been hot-wired into the world of swaps, derivatives and other off-balance sheet activities for at least twenty years before the crash of 2008. This was no ‘bad apple’ scenario.

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Are Ireland and Portugal Out of the Woods?

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Ireland and Portugal have, recently, tested the water of the money markets with some success. Portugal has issued 5-year bonds and Ireland is in the process of converting its unbearable promissory notes into long-term bonds, to be sold to the private sector. So, on face value, two of the so-called ‘program’ Eurozone countries, wards of the EFSF and the troika, are returning to the markets.

But does this mean that they are out of the woods? Is there, in other words, any justification in saying that these two countries are closer today to exiting their ward-of-the-troika status than they were last July, before Mr Draghi’s pronouncement that he will do all it takes to save the Eurozone? The answer to both questions is, I am afraid, a resounding ‘No!’ To see why this is so, it helps to remind ourselves (a) what it means to be ‘out of the woods’, and (b) what Mr Draghi’s OMT program is and how it is affeting Italy and Spain and, through them, Ireland, Portugal.

To begin with, to be ‘out of the woods’ ought to mean a capacity to finance one’s state without relying on direct or indirect state financing by any of the troika’s branches. It means that Dublin, Lisbon, Rome, Madrid can run their own fiscal policy without the direct supervision of the troika and without reliance on the troika’s willful actions to secure the sustainability of that fiscal policy. It will be my claim, below, that none of the ‘fallen’ Eurozone states (Ireland, Portugal, Spain and even Italy) are nearer this ‘happy ending’ today than they were in July 2012.

A brief history of OMT, its nature and function

The bond market calm that broke out recently is entirely due to Mr Draghi’s OMT (outright monetrary transactions) program announcement last September. What was the purpose of the OMT? Put simply, to address the utter incapacity of the EFSF-ESM bailout fund to bail out Italy and Spain. After Germany’s rejection of any suggestion that the EFSF-ESM should be allowed to borrow more money, or that the ECB’s balance sheet should be used to lever up the EFSF-ESM’s funds, it became abundantly clear that, as Spain and Italy were being brutalised by money markets shorting their bonds, there was no way that their combined 3 trillion euro debt could be stabilised. It was at that point that Mr Draghi had to step in, somehow, to plug that gap and, effectively, signal to bond traders that further shorting of Italian and Spanish debt would lose them money.

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Debt Deal: Smoke and Mirrors, Bluff and Spin

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The Communist Party of Ireland stated that working people should not be fooled by the bluff and spin being carried out by the Irish governments and EU spin doctors.

This is not a deal that will change anything in real terms to the lives of hundreds of thousands of Irish families now struggle to keep a roof over their heads or put food on the table.

As we have pointed out for some time the Irish internal troika (Fianna Fáil, Fine Gael and Labour) representing the Irish economic elites, has been and continues to be committed to paying this odious debt no matter what the cost to the people. They see no other role for themselves other than as junior partners to the imperialist powers, witness their constant declarations of loyalty to the European Union.

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Reflections After Promnight


Watching the “deal” on Anglo being done over the past few days has provoked some pretty awful feelings in me and I imagine I’m not alone in this – certainly if my facebook news feed is anything to go by. The copper-fastening of the promissory note debt by converting it into a sovereign bond represents a significant move in the wrong direction. The government has actively maneuvered to limit even further any possibility of default on that debt.

In terms of the realpolitik of this, it makes a certain degree of sense. By transforming the promissory notes into government bonds the issues has been kicked to touch – no doubt the possibility of defaulting on this debt will be completely removed from the political agenda. In other words, this technical operation will depoliticize the Anglo debt and therefore consign to history one of the most contentious elements of the legacy of the ‘financial-real estate complex’.

Moreover, the government spin has been quite effective. They have managed to sell the line that this will cost us less because it is stretched out over a longer period and that this ‘bookends’ the Anglo chapter, thus providing a sense of resolution or closure. The support of the media for the government position, even for those of us who would not be enamored with the media at the best of times, was striking. On Wednesday evening it seemed the media were struggling to find their take on the whole issue. By lunchtime on Thursday Sean O’Rourke on RTE’s lunch time news was cheerily declaring a “breakthrough in Ireland’s attempt to lift the debt burden”. Today’s Irish Times (February 8th) features an entire promissory note section, most of which reads like a press release from the Department of Finance.

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The Rest Of You Are Just Visiting

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Book Review: London's Overthrow, China Miéville (Westbourne Press)

Moving from China Miéville’s novel Scar to his non-fictional London’s Overthrow involves a change of scale not unlike something you find in Gulliver’s Travels. In his novel, the second of the New Crobuzon trilogy though not set in that metropolis but in the superbly realized Armada, Miéville’s prodigious imagination runs riot. The science-fictional citizens of Armada, an urban-like but maritime pirate city made up of countless ships physically and politically joined together, are not the twee middle-class elves and hobbits of Lord of the Rings and nor do daft dragons feature as the baddies although there are plenty of grotesque creatures that belong to some nightmarish version of the wilder fringes of Greek mythology.

There is almost too much to contend with and you are at first overwhelmed with a surfeit of fantasy (consider skipping the first five pages and the various interludes, returning to them when you get your reading breath back) until places, people and plot begin to take fixed shape. There is an awful lot happening and the neologisms and conceptual inventions flow so thick and fast that you yearn for a glossary and a map at the back of the book. The plot builds to a metaphysical climax when Armada reaches the Scar, the ontological void that Miéville calls the wound in reality, a place where Žižek’s Real speculatively materialises itself, a realm where contingency is an absolute. There are many scars in Scar, physical and psychological, but this is the ultimate incision.

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On Irish Complicity with Imperialism and Colonialism

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According to an RTE news report of the 6th of February, 2013, the Irish government is considering sending Irish Defence Forces troops to Mali to aid in the training of the Malian military, as part of the intervention by Western powers, led by the French, in Mali’s internal conflict with Islamist militants. Despite the benevolent sounding nature of this exercise, if it indeed comes to pass, it will in fact be just the latest in a long line of collaborations that successive Irish governments have undertaken with the Western imperialist powers, to further the agenda of those powers in establishing political, economic and military dominance over the world’s poorest, yet most resource-rich, countries.

The story of the conflict in Mali, as told in the Western media, is the usual formula of the noble West intervening to help save another poor backward African nation from the evils of Islamic radicalism, and restore democracy and freedom. This fairytale would at this stage in the ‘War on Terror’ be utterly laughable if it were not for the deadly serious consequences of its acceptance by the populations of the Western countries.

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EU Presidency Counter-Summit 2013

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The Counter-Summit Phenomenon – Forums for resistance and alternatives

Since the anti-globalisation movement of the late '90s and early 2000s, wherever the political representatives and economic thinkers of capital met, they encountered protest and opposition. From Seattle to Genoa, tens of thousands turned out to demonstrate against institutions like the WTO, G8 and EU. The anti-worker and environmentally unsustainable implications of their free trade and neo-liberal agenda were exposed.

With the understanding of the limitations of the model of protests at summits across Europe, came the rise of counter-summits. Generally called Social Forums these were an opportunity for socialists, trade unionists, environmental activists and others to meet. They represented an attempt to go beyond simply protesting against these institutions and to formulate alternatives as well as to discuss strategies for resistance.

The World Social Forum in Porto Alegre in Brazil which 12,000 people attended opened the process of the WSFs. It was followed with successful events in Athens, Mumbai, Nairobi and elsewhere. After playing a vital role in mobilising for the demonstrations on 15 February 2003, where tens of millions marched against a war on Iraq, the summits suffered a general decline, becoming somewhat disconnected from the real struggles happening around the world.

The model was successful in opening an important discussion, but it also contained within it an important contradiction that was always present in the anti-globalisation movement. This was the tension between an approach that was fundamentally reformist, aiming to curb the worst excesses of globalisation and capitalism and a more consistent anti-capitalist position. The formal exclusion of political parties did not keep out the various NGOs connected to Social Democracy and the reformist ideas associated with them, while revolutionary socialists were not able to openly organise.

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Magdalen Abuse of the Daughters of the Poor


Statement from the Communist Party of Ireland

The general secretary of the CPI, Eugene McCartan, responded to the release of the McAleese Report into the Magdalen laundries by saying:

“This report confirms what many people knew already: that the state was jointly involved with the Church in this horrific abuse and exploitation of the daughters mainly of the poor families of this country.

“The mentality that pervaded the Magdalen institutions is similar to that of those who controlled the industrial schools. The report exposes their total contempt for the poor; and that contempt still dominates the thinking of the political establishment towards working people.

“The report confirms James Connolly’s prediction that the partitioning of Ireland and the creation of two flawed states would lead to a ‘carnival of reaction’. Hundreds of thousands of our fellow-citizens were driven out of this state, since its very foundation, by a combination of mass unemployment, mass poverty, political persecution, and the stifling grip of a reactionary political establishment in alliance with the Catholic Church.

“The Free State government and the political establishment for decades used the Catholic Church as a battering-ram against working people and the rural poor, to enforce their submission physically and ideologically and as part of their anti-radical agenda since the founding of this deeply flawed state.

“The survivors of these savage exploitative institutions must be given the maximum support and compensation from the state. It is is the least that can be done.”

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The McAleese Report on the Magdalene Laundries (2013)


Yesterday the McAleese report on the Magdalene Laundries was published. Like many others, I expected that the report would be a whitewash. Why did I expect that?

Martin McAleese is the husband of former President of Ireland, Mary McAleese. She was chosen for election by reactionary forces who sought to undo the advances achieved during the presidency of Mary Robinson, who was seen by them as a left-wing president who sought to advance dangerous causes such as feminism (she had been a highly successful feminist lawyer before her election). For an interesting insight into the selection process within Fianna Fáil read this article.

During her tenure she made many appearances at Catholic Church events. Her most controversial moment came, typically enough, when she took communion in an Anglican Church of Ireland cathedral. That her only controversial action should be theological is characteristic of her presidency which was marked by outward expressions of piety.

In 2010, then President McAleese gave the opening lecture at a conference of the right-wing Italian Catholic movement Comunione e Liberazione in Rimini, Italy. This is how The Italian correspondent of The Irish Times described that organisation:

“Founded in 1954 by Italian Monsignor Luigi Giussani, Comunione e Liberazione (CL) is, to some extent, an Italian version of the influential Spanish lay movement, Opus Dei, although it has no formal connections with Opus Dei. Throughout its history, it has received both public and tacit support from at least three popes – Paul VI, John Paul II and the current pope, Benedict XVI.

The current papal household is run by consecrated members (Memores Domini) of CL. Generally perceived as right-wing, conservative and integrationalist, CL has often been politically active in Italy. In the 1970s, the movement played a prominent part in failed campaigns to prevent the legalisation of both abortion and divorce. CL has always counted important shakers and makers among its public supporters, including most notably the seven-times prime minister Giulio Andreotti.”

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Cork Launch of Irish Left Review Journal @Solidarity Books, 7th of Feb, at 7.30pm

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Solidarity Books hosts a talk by Dr Conor McCabe – ‘Who Benefits from Austerity?’ – as part of the Cork launch of the Irish Left Review Journal – on Thursday 7th February 7:30pm

On Thursday, 7th February at 7:30pm Solidarity Books, 43 Douglas Street will host the Cork launch of the Irish Left Review Journal.

The event will include a talk from Dr. Conor McCabe, the author of the acclaimed book, ‘Sins of the Father’, which analyses the development of the Irish economy throughout the 20th Century right up to the current crisis, without resorting to just pointing fingers at ‘a few morally bankrupt individuals’ in an otherwise sound system.

Conor McCabe, who currently teaches at the UCD School of Social Justice, and is a regular contributor to Irish Left Review, will pose the question of ‘Who Benefits from Austerity?’ While popular disgust with TD’s, bankers and other elites’ privileges is rampant, austerity programmes are still justified on the basis that we all must pay for a crisis that we apparently all helped to create. What do we make of this state of affairs?

This will be Conor McCabe’s third visit to Solidarity Books in the last two years since the release of his book, and like the previous events, this promises to be an evening of animated discussion.

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Thatcherism Delayed? The Irish Crisis and the Paradox of Social Partnership

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There has been much criticism recently here and elsewhere about the strategy taken by the Irish Congress of Trade Unions as a response to the crisis, the establishment, defending of, and piñata like status of the Croke Park Agreement, and the thinking behind the Lift the Burden ‘protest’ on the 9th of February which is supposed to send, we are told by David Begg a “very clear signal to Europe”. The clear message seems to be that Congress want to get Irish workers to support the government’s efforts in negotiating a deal on Ireland’s bank debt along the vague lines expressed in the June 2012 Summit that “the Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme”. In light of this ineffectual ambition on the part of Congress I thought it would be worth providing some context in the form of this very informative article by Terrence McDonough and Tony Dundon, of the School of Business and Economics at NUI, Galway. The follow is an excerpt from the final part of a much longer paper called Thatcherism delayed? The Irish crisis and the paradox of social partnership which was originally published in Industrial Relations Journal (41:6, 544–562) in 2010.

The whole article reviews the state of Irish industrial relations in light of the current economic crisis. It argues that social partnership was rooted in the continuation of a tradition of permissive voluntarism with minimal employment rights with both direct and indirect implications for the current Irish economic crisis. As such, Irish industrial relations cannot be understood in isolation from a broader analysis of the rise and fall of social structures of capitalist accumulation.

I would like to thank Terrence McDonough and Tony Dundon for permission to republish this section of the paper on Irish Left Review.

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Taking Democracy Seriously


In a recent article on this site, Miriam Cotton took me to task for 'intellectually-rationalised paralysis' in light of the current crisis. Her article -written with admirable openness and honesty- is an acid criticism of the failure of the Irish Left to put together a coherent response to the present crisis.

I disagree with many aspects of her analysis. I don't believe what she describes as 'rapacious, international financial corporatism' is 'worse than capitalism': it is capitalism. I certainly wouldn't treat my own writings as indicative or representative of tendencies on the Irish Left -for good or bad. Indeed, if what I write ends up getting treated in that way, it highlights one of the serious problems of the Irish Left: in public, it is either very small, or very quiet, or both.

Miriam's analysis proceeds from the view that there ought to be a development similar to what has happened in Greece, as described by Helena Sheehan's recent piece on Greece: a proliferation of strikes at general and local level, resulting in an increasing convergence of the politics of the street with the politics of the ballot box.

By contrast with Greece, Miriam says Ireland's 'austerity and financier-facilitating ‘trade unions’' have 'have stood aside in pale and limp demur', as the austerity regime of bailouts, cutbacks and the destruction of social rights extends itself. No arguments from me here.

Given this context, she believes that my claim, made at the end of my ICTU piece in relation to 'the climate of grim sacrificial inevitability' (my words) that 'we need imaginative ways of communicating the conflict, of capturing people’s commitment to a struggle for democratic rights' is 'lobbing cold water over any idea' of calling for strikes.

She suggests that in effect I am saying 'sit down again everybody. As you were. We need to do lots more talking and thinking before we act.'

Let me address this as clearly as I can.

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Actually Existing Central Planning and the Logic of Accumulation

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Matthijs Krul in his Notes and Commentary blog has provided a very thorough and critical Marxist analysis of Seth Ackerman’s essay The Red and the Black published in the latest issue of Jacobin magazine. We’ve already posted the section of Doug Henwood’s show, Behind the News which features a long interview with Ackerman about his essay.

I believe it’s worth reading Krul’s response for those interested in thinking about what a socialist economy would look like, and the how objections to its potential are ill-founded. The post is positive about many of the points raised by Ackerman, but he highlights their limitations and does so in a much convincing way than others who have so far tackled The Red and the Black essay. I’d like to provide a large chunk which gets to the heart of his critique, but also indicates how ‘central planning’ which is seen to have failed in the Soviet Union, flourishes today within capitalist society. Krul’s argument is that this failure was a political one as the Soviet economy remained subject to the logic of accumulation.

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