European Union

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Anglo: Not Our Debt Campaigners Alarmed at ECB Pressure

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Debt Justice Action – a coalition of community, trade union, global justice, academic, faith-based and other groups that hosts the Anglo: Not Our Debt Campaign –  has described as “alarming” media reports that the Irish government is being pressured by the European Central Bank to quickly sell on to the private sector the government bonds it issued to replace the Anglo promissory notes in 2013.

Spokesperson Niamh McCrea said that any such sale would “make an already bad deal even worse”.  She said, “The debts run up by a bank like Anglo, which is under criminal investigation, should never have been taken on by the Irish people through the promissory notes, and those notes should not have been turned into sovereign debt, as the government did last year, extending the repayment period but with no write-down of the debt”.

Andy Storey pointed out that as the bonds are currently held by the Central Bank of Ireland, any interest paid on them stays with the Irish state, but that “if they are sold to the private sector, as the ECB is now pushing to happen quickly, then the same class of creditors and bondholders whose gambles were made good by the Irish government will end up making yet more money by raking in the interest payments due”.

Ms McCrea called on the Irish government to “for once, resist ECB pressure and insist that the bonds remain with the Central Bank with a view to negotiating the write-down of this odious and illegitimate debt”.

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Friday Stat Attack: Ireland Holds the Record for Longest Domestic Recession in the EU

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Some commentators are celebrating our ‘recovery’.  Some have even said that we have recovered relatively quickly, after a dramatic fall.  Here we go again – rewriting history, distorting the current situation.

Ireland holds the record for the longest domestic demand recession in the EU.  And the really bad news is that we may not be out of it yet.  The following table breaks down the length of consecutive domestic demand recession that EU countries have suffered since 1960.

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Almost all EU countries have, since 1960, suffered at least a two-year domestic demand recession – with the exception of France and Malta (though data only goes back to 1996 for the island).  Some domestic demand recessions have been harsh – Estonia’s two-year experience saw a fall of over 30 percent; some have been mild – Poland’s two-year experience saw a fall of less than one percent.

Ireland – along with Spain and Greece – have the longest consecutive domestic demand recession:  six years.  And in the tradition of breaking the tie, let’s count the number of years that domestic demand fell since 1960:

  • Ireland:  12 years
  • Greece:  10 years
  • Spain:  9 years

With 12 years where domestic demand fell, Ireland wins on points.

Indeed, Ireland wins the double:  longest domestic demand recession and the highest number of years where domestic demand fell.  Since 1960, Ireland has spent 23 percent of the time suffering from falling domestic demand. That’s the cup.

But, surely, this is nit-picking – what with all that recovery going on.  So don’t worry about it.

Enjoy the weekend.

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Launch of ATTAC Ireland, 5/6 April

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Disarm the Markets: Launch of Attac Ireland with a public talk by Esther Jeffers (University of Paris VIII and European Attac Network) and IFSC walking tour with Conor McCabe.

Where: Room 4-027, Dublin Institute of Technology, Aungier Street, Dublin 2

When: Saturday 5th April, 2pm.

Attac is an international movement working towards social, environmental and democratic alternatives to neoliberal globalisation. Founded in France in 1998, it fights for the regulation of financial markets, the closure of tax havens, the introduction of global taxes to finance global public goods, the cancellation of debt, fair trade, and the implementation of limits to free trade and capital flows (see www.attac.org).

5th April marks the launch of the Irish chapter of Attac. Attac Ireland is delighted to welcome Esther Jeffers who will speak at the event. Esther is a lecturer at the University of Paris VIII and a specialist on shadow banking and finance in the Euro area.

Esther’s talk will be followed by an open meeting for anyone interested in becoming involved with Attac Ireland. This meeting will provide an opportunity for people to learn more about Attac, and to discuss how Attac Ireland could be developed to challenge financial power and injustice through education and activism.

These events will be followed on Sunday morning 6th April, with a walking tour of the Irish Financial Services Centre (IFSC) by Dr Conor McCabe (UCD School of Social Justice). Time tbc.

Follow Attac Ireland on Facebook

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Bishop Accuses Spanish Women of Holocaust

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I joined the International Women’s Day march in Valencia on Saturday night. Sources estimate between 10,000 and 20,000 people turned out for the event, from my perspective about 40 percent of those marching were men. Valencia is Spain’s third largest city, after Marid and Barcelona, where marches also took place. This day is usually a day of celebration of women in history and society as well as a chance to draw some attention back to the gender inequalities still present in work and pay. However, yesterday’s event also provided an opportunity to demonstrate the anger and exasperation building up around the new anti-abortion law being carried through the Spanish parliament by the conservative Partido Popular.

The proposal would overturn a very recent law (2010) that legalises abortion on demand in the first trimester, meaning that rape or a serious threat to the woman’s health – currently the conditions for abortion in the second trimester – would have to be proven by anyone seeking an abortion. I have read that somewhere between 60 and 80 percent of the Spanish people oppose this bill. I’m not sure how accurate that is but the big turnout across Spanish cities for what is normally a fun family event was telling. The day before the protests I attended an assembly of women from the trade union Comisiones Obreras. The hall was filled with about 200 women and was brimming with anger. In one of the opening speeches tribute was paid to a lady called Concha Carretero who died on January 1st this year at the age of 95. Carretero’s story, as I grasped it in my broken Spanish, reminds me of the potency behind the word often used at Spanish protests – indignada.

Carretero, born in 1918, was first imprisoned when Franco’s army entered Madrid in 1939. Arrested after attending a meeting of the Juventudes Socialistas Unificadas (United Socialist Youth) on her first night in prison, she was beaten and electrocuted and made to clean up the blood of her fellow captives. Lying unconscious after a beating on the night of August 4th, 1939 her cellmates, thirteen women, were taken and executed by firing squad. Almost a year later, Carretero was released only to be quickly re-arrested. This time she avoided freezing to death when stripped naked and doused in buckets of cold water by exercising all night in her cell. By then Carretero’s father, an anarchist, had been found dead on the street, and her mother, who had suffered a serious injury when a lift fell on top of her while cleaning in the dark shaft, slept unbeknownst to her daughter under the archways of the prison where she was held. Not long after her release Carretero’s husband and father of her first child was arrested and shot by firing squad. Carretero’s crime had been her involvement and work with the Republican army, making clothes and minding the children of men and women on the front during the Civil War. But more than that it had been to dare challenge the might and divine authority of fascist Spain. Going on to re-marry and have five more children, Carretero attended the Almudena cemetery in Madrid every year to mark the anniversary of the execution of her thirteen cell mates, the Thirteen Roses, and every year she called for the “Third Republic”. (Further info here: Fallece Concha Carretero, compañera de las trece rosas rojas, by Gustavo Vidal Manzanares, nuevatribuna.es).

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Ukraine: The Next Domino to Fall to the West?

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The events currently taking place in Ukraine have an eerie feeling of familiarity about them – indeed, that feeling is becoming normalised in the western media. From Afghanistan in the late 1970s and 80s, to Yugoslavia in the 1990s, to Iraq, Libya, Syria, and now Ukraine, the pattern of ‘humanitarian’ imperialism is becoming the standard blueprint for the western geo-political agenda.

On the face of it, the events in Ukraine are clear-cut: a corrupt and repressive government, the age-old spectre of the Russian bogey-man in the shadows, and of course, the innocent, peace-loving, flowers-in-gun-barrels forces of democracy and liberty. It really should sound familiar by now. The story was the same in Afghanistan, it was the same in Iraq, it was the same in Libya, it is the same in Syria. Inconveniently for those of the humanitarian-intervention brigade in such influential western liberal institutions (and, by miraculous coincidence, US government puppets) as Amnesty International, these stories were and are, for the most part, propaganda – that is to say, lies, designed to achieve the support of the general public for what would otherwise be barefaced military aggression. This wouldn’t fly – the west has to play the great saviour in order for its unparalleled savagery to be acceptable.

If we look closer at the protesters in Ukraine, closer at least than the western propaganda machine does, we can clearly see a motley crew of fascists, ultra-nationalists, and conservatives; chief among these are the balaclava-clad thugs of the ‘Svoboda’ party, which, for instance, glorifies the WWII-era Ukrainian fascists who collaborated with the Nazis in rounding up and executing Jews, communists, partisans and other undesirables. Photos and videos from the riots in Ukraine show what are essentially camouflage-clad, helmeted and masked urban guerrillas, assaulting and kidnapping police officers, humiliating and beating people on the streets, vandalising government buildings, and whatnot – all the while wearing EU-flag patches on their sleeves and waving the flags of the EU and various neo-fascist slogan side-by-side.

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A Union for Big Banks

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This report was originally published on the Corporate Europe Observatory website today, the 24th of January 2014.

Far from being a solution to avoid future public bailouts and austerity, Europe’s new banking union rules look like a victory for the financial sector to continue business as usual.

In late 2013, the EU took a major step towards a “banking union”. This has been presented as a series of measures in response to the financial crisis to avoid a repeat of the vision of contagious risk and bailed out banks.  In the preceding months a “single rule book” for banks and a European-wide system of supervision had been adopted. Finally in December a set of rules on a common regime of “resolution” (winding up) of ailing banks was agreed, and the European Council decided its version of rules on how to manage the question of the costs of resolution.

EU Single Market Commissioner Michel Barnier was a happy man:

“Today is a momentous day for banking union. A memorable day for Europe’s financial sector… We are introducing revolutionary changes to Europe’s financial sector… I have now delivered 28 proposals to better regulate, supervise, and govern the financial sector and a more integrated, less fragmented single market. So that taxpayers no longer foot the bill when banks make mistakes. Ending the era of massive bail-outs.”1

These bold promises are bound to be received well by the public in most parts of Europe. With the financial crisis, member states took over massive debts originated in the financial sector to save banks. Four and a half trillion euros had been risked for bailouts – and the final bill was 1,7 trillion euro. Not only did this send national economies spiralling downwards and set off a public debt crisis, it also led to a regime of harsh austerity policies, imposed by the EU institutions and the IMF as conditions for loans.

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Exhibition on Ireland’s EEC Accession Referendum in May 1972

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From the 16 November until Thursday, 21 November next an exhibition on Ireland’s EEC Accession referendum is taking place at the Culture Box, 12 East Essex Street, Temple Bar, Dublin 2.

The exhibition consists of material on the referendum campaign around Ireland’s accession to the then EEC on 10 May 1972.

That referendum debate saw many political and cultural figures contributing, including Garret Fitzgerald, Tom Barry, Alan Dukes, Desmond Fennell, Jack Lynch, Michael D. Higgins, Charlie Haughey, Mary Robinson, Declan Costello, Niall Tóibín, George Colley and Luke Kelly.

Ireland into the EEC: The 1972 Debate from Connolly Media Group on Vimeo.

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On the Irish government’s “precautionary credit line” and “exiting the bailout” – The Emperor has no clothes

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Statement from the Communist Party of Ireland

The Communist Party of Ireland today warned Irish workers not to fall for the latest ruse by the bankrupt political establishment with its announcement that this failed state will leave the “bail-out programme” — which is in fact a restructuring programme — by 15 December with or without a “precautionary credit line.”

This will not mean an end to any of the current or planned cuts in health, education, or social welfare, nor end the drive for privatisation. Nor will it prevent the need for continuous cuts in the future. The servicing of the debt is costing the Irish people nearly €9 billion per year — similar to the annual education budget. Austerity will be a permanent feature of the lives of working families far into the future.

Debt has become the principal political means for strengthening external mechanisms of control by the EU Commission – dominated by Germany – not just of this state but all member states and in particular over the other heavily indebted peripheral states. The capacity of the peoples across the European Union to democratically affect political and economic changes is being rapidly diminished. Democracy is being hollowed out.

It is simply not in the interests of the Irish political and economic establishment to assert independent actions, their interest lies in ensuring that the current process continues and deepens.

Ireland continues to be at the mercy of “the markets” – those who control the markets are those who control the troika.

Debt is also being used to push through the long-term strategic imperative of economic restructuring that is intended to restore lost inequalities and to impose new ones, not only in Ireland.

The announcement today has more to do with appearances than with reality. Just as we were the poster boy for economic development during the “Celtic Tiger” period, we are now being touted as the poster boy of good behaviour for accepting austerity without a whimper.

The European Union has to show to the people of Greece, Spain, Portugal and other EU member-states that if they take the austerity medicine without resistance, it works.

The system itself is in a deep and deepening structural crisis with debt and stagnation just the latest manifestations.

The emperor has no clothes.

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The Euro – exit stage Left?

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Paul Murphy MEP (Socialist Party) contributes to a discussion on what position the Left should take on the euro.

It hasn’t gone away, you know. Although much of the media and political commentary would suggest otherwise, the eurozone crisis is very far from resolved. The economies on the periphery of Europe all face deep economic crisis, the burden for which has been heaped upon working class and poor people, with the devastating social consequences seen at their most extreme in Greece. The situation in much of the rest of Europe is not much better. The political consequences of this ongoing crisis have been seen with near government collapse in Greece, Spain, Portugal and Italy over the course of the summer – with mass disillusionment with austerity a key underlying feature in all cases.

The Irish capitalist class has long tried to separate itself from the other peripheral countries – repeating the mantra that Ireland is not Greece and trying to demonstrate it by more effectively implementing austerity. It has been assisted in that task by the leadership of the trade union movement, which tied to the Labour Party, has attempted to stifle opposition

However, the facts and the crisis remain. The debt to GDP ratio is now at 125% in Ireland and rising. Another dramatic wave of the eurozone crisis could be unleashed at anytime by political or economic developments, the effects of which would be strongly felt in Ireland. The euro will again be at the centre of political developments.

As Ireland moves into primary surplus, the euro could become an important justification for austerity used by the political establishment and a battering ram against the Left. An important reason given not to default on debt or break from austerity policies may be the possible consequence of Ireland being forced out of the common currency. If the experience of Greece tells us anything, it is that an important argument of right wing forces in the next local and European elections, but in particular in the next general elections could well be – if you implement left or socialist policies, Ireland will be out of the euro and economic disaster will result.

Socialists and the Left must prepare to tackle this scaremongering, to demystify the euro and to put forward a left ‘exit strategy’ from the crisis that accepts the possibility of exiting the euro and puts forward radical socialist economic measures to deal with the consequences. There are two pitfalls common on much of the left to be avoided here.

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Breaking the Link? It’s Getting Stronger. It’s Strangling Us

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While Eurozone Governments continue to debate the details of the banking union; while the Irish government continues to insist that the deal reached last year includes bailing us out for past bank debt; while commentators debate and measure the link between public and banking debt; while the ECB steps into the void with its own peculiar version of ‘breaking the link’ between banks and states – while all this is going on, that game-changer which would break the link between state and banking debt is becoming ever more elusive.

With the latest data from Eurostat we can track the impact of banking debt on the public finances of Eurozone governments.

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2010 was the worst year – with plucky little Ireland contributing nearly half of the total €66 billion.  It eased off in 2011 but it came back with force in 2012.  In total, the banking debt has cost the Eurozone €138 billion but this is just the Eurostat’s accounting of the largely capital impact on General Government Debt.  It doesn’t include interest payments, cost to wealth funds (such as Ireland’s National Pension Reserve Fund) or the impact of contingent liabilities, never mind the impact on the economies in general.  So this is a narrow accounting of a cost which is much, much higher.

Who got hit in 2012?  Ireland didn’t.  In fact, we recorded a small income increase due to bank repayments (€1.6 billion).  The main victims, however, can be found in the periphery.  Spain, Greece and Portugal accounted for 86 percent of the net impact on the Eurozone in 2012.  Spain, in particular was hit, with an impact of €39 billion on their public books.  But other countries got hit: Belgium, Germany, Austria, France and the UK with minor impacts in other countries.  In short, 2012 was the second worst year since the crisis began.

But the fun doesn’t stop there.  There are two more tables which show the continuing bank-debt burden on the Eurozone.  First, is the relationship between the stocks of government financial assets and liabilities arising from the support of financial institutions in the crisis.

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A Dialogue on Democracy and the Republic – Part One

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Renewing the republic, rebuilding the republic, a new republic, a Second Republic, how stands the republic: it all circulates in the verbal debris of Ireland’s political and economic crisis, but what does all this republic stuff mean nowadays? And what is to be done with it? I wanted to pursue the idea of the republic in relation to the wider Eurozone crisis. What follows is the first part of a dialogue with philosopher Juan Domingo Sánchez Estop on the idea of the republic.

UPDATE: Part 2 of this dialogue is now available here.

Juan Domingo Sánchez Estop taught modern philosophy in the Universidad Complutense de Madrid from 1981 to 1986. He translated Spinoza’s correspondence into Spanish and, as a member of the Association des Amis de Spinoza, has taken part in seminars and congresses in France and Italy. He is currently working as a senior translator in the Council of the European Union and is specialized in foreign policy matters. He is an advisory editor of the review Décalages (on Althusserian studies). He writes in European and Latin-American publications on Spinoza, Althusser, modern philosophy and political philosophy. His latest book is La dominación liberal (Liberal Domination. Essay on liberalism as a power apparatus) (Tierra de Nadie, Madrid, 2010). He is currently linked to the Philosophy Center of the Université libre de Bruxelles, where he is preparing a PhD on Spinoza in Althusser. His blog, in Spanish, is Iohannes Maurus.

Richard McAleavey: The explosion of the 15-M in the Spanish State in 2011 began with the slogan Real Democracy Now! as its focus. It appealed to the sense among growing sectors of the population that the existing political order, despite claims to the contrary, was not democracy, given that decisive political power rested with powerful political and financial elites. This conflict opened up between ‘real’ and ‘fake’ democracy -between the appearance of the multitude in public squares and the police forces sent in to batter and criminalise and protect the existing regime- in seems to support Jacques Ranciere’s assertion that ‘democracy is not a form of state’.

Juan Domingo Sánchez Estop: One of the main problems the 15M had to face after its sudden appearance is the lack of a real political culture. There was indeed an important pars destruens in the action and the reflection by the 15M: they recognized, after decades of the so-called “culture of the transition” based on the idea of a “consensus on the need for a consensus”, that no democracy could ever work without a real place for antagonism.

Unfortunately, in post-Franco Spain, a tight consensus was imposed by both Right and Left on two basic tenets: that there is no alternative to market economy and that a very particular brand of representative democracy based on strict partitocracy, with hardly any direct political participation from the citizen, was the only game in town. Beyond these limits lay the Hell of economic “irresponsibility” and, even worse, the Hell of terrorism. All the anti-democratic features of the Spanish regime could be in some way or other concealed behind the “necessary compromises” of the “young democracy”, but after more than three decades, the much admired “young democracy” didn’t grow into an actually democratic form of government. In a country where the Left traded real citizens’ empowerment in for its integration in the system and a broad liberty in moral matters -as symbolized by Madrid’s “movida” and Almodovar’s films- everything remained quiet until the advent of the crisis.

There is no doubt that the 2008 financial and economic crisis revealed the regime as what it really is to large social sectors, mainly younger educated people, most of them the sons and daughters of working class families. For one month the 15M occupied the central square of Madrid, the Puerta del Sol, in some way imitating the north-African movements against tyrannical and semi-colonial dictatorships. People suddenly noticed a certain parallel between despotic oligarchical regimes and what until then had featured as a European democracy. Like in the neo-colonial world, the Spanish government acted in behalf of economic and financial powers entirely alien to the Spanish people, which saw itself obliged to pay back a debt it had never decided to take out. The very difference between what democracy is supposed to be, i.e., empowerment of the citizens and active participation in public decision-making, and the reality of an autocratic pro-finance regime became apparent. And people reacted.

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Report: Unmasking Austerity: Lessons for Australia, on the disastrous economic and social effects of austerity in Europe and North America

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UNMASKING AUSTERITY: Lessons for Australia, by Dexter Whitfield

This new report, Unmasking Austerity: Lessons for Australia, documents why austerity failed and its disastrous economic and social effects in Europe and North America and highlights why Australia should not adopt these policies. Government debt continued to increase, reduced demand intensified the recession, negative or weak growth prevailed and the private sector failed to invest. The cost of lost output, reduced wealth, mass unemployment and government intervention runs into trillions in any currency. Public spending cuts and closures increased poverty and widened inequality as working people and the poor were made to pay for the failure of the banks, financial markets and wealthy elites. Austerity advocates were equally committed to embedding neoliberalism in the public sector and the welfare state and reconfiguring the role of the state.

Prepared for the Don Dunstan Foundation and Public Service Association of South Australia and published by the Australian Workplace Innovation and Social Research Centre, University of Adelaide.

http://www.adelaide.edu.au/wiser/WISeR_unmasking-austerity.pdf

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To the Crucible II: A Further Irish Engagement with the Greek Crisis and the Greek Left

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This is a sequel to To the crucible: An Irish Engagement with the Greek Crisis and the Greek Left published on the 21st of January, 2013.

The Dominant Narrative

“Things have gone very quiet in Greece, haven’t they?” So many people said that to me in the past six months or so. I responded that there was a lot going on, even if international media weren’t covering it. There were civil mobilisations of teachers and transport workers, as well as rising unemployment, emigration and impoverishment, being met with continuing protest, strikes, occupations. Even so, I sensed a lull in the rhythm of resistance, since the big demonstrations opposing the passage of the third memorandum last autumn. Obviously people couldn’t keep going at that pitch all the time, but how many were succumbing to exhaustion, despair, defeat? How many were quietly going about their work in solidarity networks, policy development, political education?

The story circulating in May, promoted by its government, was that Greece had stabilised and protest had subsided. Grexit had given way to Grecovery. Antonis Samaras, who was most actively articulating this, touring the world with the good news, even heralded a Greek ‘renaissance’. The feeblest of economic indicators were offered as evidence, although international commentators, even ones who wanted to believe this story, found it hard to get past the fact that most indicators still pointed in the opposite direction. In other statements, Samaras conceded that they hadn’t really changed the numbers yet, but insisted that they had eliminated the ‘negative psychology’.

Many Greeks were scathing, pointing out that tiny shifts from rating agencies and bond yields paled into insignificance aside the continuing freefall of the economy and the still deteriorating conditions of life for non-oligarchic Greeks. Among indicators being trumpeted were lower wages, which might be good news for investors, but hardly for workers. Yanis Varoufakis labelled the Greek success story as the ‘latest Orwellian turn of the Greek crisis’ and laid the economic facts on the line’

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Latvia Doesn’t Offer Europe a Success Story

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The Council of Europe has confirmed that Latvia will be accepted into the Eurozone from 1 January 2014. Commission Vice-President Olli Rehn has called the Baltic nation “a success story” and said that its “shows that a country can successfully overcome macroeconomic imbalances, however severe, and emerge stronger.” 

At a time when calls for a change in policy direction grow stronger every day, when the Eurozone heads towards recession with the European youth unemployment rate at 23%, pro-austerity officials badly need a success story. Latvia would seem to fit the bill; having weathered its fiscal crisis to return to modest growth, it could be the model student for the indebted European periphery. But those looking to the Baltic for proof that 'austerity works' should look a little closer. 

Much like Ireland, Spain, Portugal and Greece, Latvia experienced a short period of intense growth, with a property market bubble fuelled, in the Latvian case, by cheap credit from Swedish and German banks. When the credit stopped, the economy did too and the Government nationalised Parex, the country’s second largest bank, taking on its Euro-denominated debt. Private debts were transformed into public liabilities, creating a fiscal crisis. So far, so familiar. 

After the dissolution of the incumbent administration, the newly-elected coalition government responded with an aggressive austerity strategy. They targeted healthcare, education and public administration, with 30% cuts to public sector numbers and wage-reductions of 40%. Unlike in many other public-debt troubled countries, Latvia also squeezed old-age pensions, causing significant hardship for retired citizens. Despite IMF suggestions, currency devaluation was ruled out of the question and corporation tax remained unchanged at 15%. GDP shrank by a quarter over two years, leaving one in five workers unemployed. 

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