Above is a letter to Portuguese Finance Minister Mário Centeno co-signed by European Commission Vice-President Valdis Dombrovskis and EU Economic Affairs Commissioner Pierre Moscovici, asking for explanations as to why the Portuguese government is planning to cut structural deficit by only 0.2% of GDP in 2016 – which, the Commission notes, is “well below” the recommended target of 0.6% of GDP. More below.
Vincenzo Scarpetta wrote in Open Europe about that letter:
Vincenzo Scarpetta wrote in Open Europe about that letter:
"Compared to Alexis Tsipras in Greece, Costa’s rhetoric was far less inflammatory – but his pledge to “turn the page on austerity” in Portugal was just as unequivocal. The Commission’s letter was the first reminder to the new Portuguese government that Eurozone membership and austerity are not easily separable. I am pretty sure that it is not going to be the last."In the summer months of 2015, in the world’s eyes Merkel became the brutal auditress of the Greek Republic (and the compromiser of its sovereignty, in the name of fiscal rectitude).
And the protests everything, propose nothing politics of populism - The Podemos and Syriza capitulations indicate the absurdity if Sinn Fein fiscal economics.
Ed Moloney wrote in February 2016, 'Now We Know Why Lloyd Blankfein Felt Re-Assured By Gerry Adams…':
Ed Moloney wrote in February 2016, 'Now We Know Why Lloyd Blankfein Felt Re-Assured By Gerry Adams…':
"Gerry and the boys would see that the banks were looked after. No Syriza nor Podemos are Sinn Fein. Well, actually, maybe Syriza...
I have argued many, many times in these columns and elsewhere that you cannot begin to understand Sinn Fein unless you realise that politically it is a chameleon. It believes in nothing, has no ideological roots and loyalties, can hold one view one day and a completely different one the next, and that the stance it decides to take is determined solely by its potential to attain one overriding objective: power and the office that comes with it.
Like a chameleon, Sinn Fein changes its colours to suit its environment. So it has been with the Irish banks and the bailout."
In response to the launch of the Sinn Fein manifesto for the 2016 General Election, Arthur Beesley wrote a piece 'SF Now Accepts Legal Targets For Debt Must Be Met - Sinn Féin’s manifesto marks something of a change of tack':
"The party relentlessly opposed the painful post-crash austerity drive, and it campaigned loudly against Europe’s fiscal treaty in the 2012 referendum. Now it claims to comply with stringent budget rules laid down in that treaty, rules which will seriously curtail the next government’s room for manoeuvre.
It seems, therefore, that Sinn Féin accepts that legal targets vis-à-vis the continuous reduction of deficits and debts must first be met before any new money becomes available in any given year.
Doing that while delivering a huge expansion in government programmes is a very tall order indeed, but it’s the same for all parties. It’s still a shift for Sinn Féin, which is viewed with distrust in business circles and faces political attack for lacking economic credibility. It will still take a very long time to convince its most ardent critics."Raoul Ruparel had earlier written in Open Europe that Ireland shares much with the politics of other EU nations, with anti-austerity populist parties and struggling incumbents. He gave this analysis of Sinn Fein:
"There is also the rising populist tide in the form of Sinn Fein which has managed to some extent to reinvent itself as an anti-austerity party, supplementing its nationalist roots which were themselves bolstered by serious interference from Brussels. However, after tying itself closely to Syriza – current Greek Finance Minister Euclid Tsakalotos spoke at Sinn Fein’s annual conference in April this year – it has suffered a blow from Syriza’s complete capitulation, similar to Podemos in some extent. Many were already suspicious of its economic policies, while the recovery made them less attractive and the situation in Greece has poked holes in the prospect of an alternative economic vision. Their recent poll decline is clear, though this is also likely down to the economic recovery and the government recovering from lows over the water charges scandal at the end of last year."
He continued:
"Furthermore, one has to question whether, having seen a number of populist parties enter government and struggle, Sinn Fein is ready and willing to take the same route right now."He also said a Fianna Fail/Fine Gael coalition would make more sense than a Fianna Fail/Sinn Fein coalition. Vincenzo Scarpetta wrote on Open Europe, ‘Greek bailout agreement deals blow to Podemos’:
"Turmoil and capital controls in Greece are likely to turn undecided Spanish voters away from Podemos, since they will think the party won’t be able to keep its promises. The bottom line of the Greek negotiations is that a different euro is not on offer. There is a clear path of fiscal discipline and structural reforms, and if you don’t agree with that you can be shown the door."He also wrote a piece, ‘Podemos: Down but not out’:
"Anti-establishment party Podemos is on a declining trend in opinion polls and appears to have been hit the hardest by SYRIZA’s capitulation in the negotiations between Greece and its Eurozone partners."Janan Ganesh wrote in the FT what would happen if we get a Miliband government:
"It is possible to script a Miliband government too. He would dash left for a year, tampering in markets and raising taxation at the top end. He would over-reach, upset voters and businesses, and end up sheepishly governing from the centre for the sake of survival. Soon, Mr Miliband would have the weary look of someone who knows he is not going to change the world after all. The same retrenchment was forced on François Mitterrand in France in the 1980s, Bill Clinton in America in the 1990s and again in France under François Hollande."He noted that like all other left wing politicians, he would retrench to the market-happy middle ground:
"Leftwing leaders in rich countries do not bring “chaos”, as the Tories suggest. The truth is more damning: their ideas rarely survive contact with the realities of power."
THE FUTURE OF SINN FEIN IS TO BECOME FIANNA FAIL
"There might be a few tweaks, but the substance of the status quo would remain untouched.”The term for this, is as Newton Emerson and Fintan O’Toole said, Sinn Fein would just turn into an early Fianna Fail. Alan McQuaid of Merrion capital said the same, that reality of government won’t match the rhetoric of opposition.
Fintan O'Toole wrote:
"What Sinn Féin is likely to do in power… there are highly exaggerated fears. Sinn Féin will fleece the rich, drive the multinationals out of the country and crash the economy. No it won’t.
Sinn Féin is not a revolutionary party. It is a highly pragmatic political machine.
It might tilt the balance of economic policy somewhat in favour of the less well-off – which would be very good for the long-term health of the economy. But the notion that it would radically alter the nature of Irish society is fanciful."He continued:
"There is no reason to think of Sinn Féin in government as being much different in this respect from Fianna Fáil in the 1930s."Chris Johns wrote in the Irish Times:
"There is what I will call the “O’Toole conjecture”, which posits that Sinn Féin, far from blowing up the Irish economy, will merely turn into a version of 1930s Fianna Fáil. In that instance, nationalistic political promises were mostly forgotten once power was obtained. The conjecture implies (I think) that Sinn Féin would, in government, quietly shelve the taxation plans that so worry Goldman Sachs.
From a business perspective I’m not sure the 1930s comparison is comforting: Fianna Fáil presided over an economic war with Britain and an economy that two decades later still had more than half of its exports in the form of cattle."Fintan O’Toole wrote:
"There is no reason to think of Sinn Féin in government as being much different in this respect from Fianna Fáil in the 1930s."Newton Emerson said:
"Ireland won’t turn into Greece. Sinn Fein will just turn into Fianna Fail."Just as Fianna Fail came round to taking the Oath of Allegiance, I’ve explained here how Sinn Fein can swear allegiance.
Newton Emerson wrote:
"Sinn Fein moves to the pragmatic centre at the merest sight of a lever of power."He continued:
"Sinn Fein is certainly capable of wrecking the Irish economy but the risk it poses is not due to hard-left policies, as Frank Flannery implied. Gerry Adams seized the opportunity of the recession to take an anti-austerity stance that could have accelerated him into office by the symbolic date of 2016. Yet as soon as recovery made this redundant, Sinn Fein backed away from any pretence of becoming an Irish Syriza.
It will now resume its natural long-term trajectory of becoming the next Fianna Fail — although the past seven years have not been entirely wasted, as the collapse of Labour removes any temptation to supplant that party instead."Newton tweeted:
"The left-wing codswollop is totally irrelevant - Sinn Fein is now coming after Fianna Fáil as a ‘national movement’."He also wrote:
"As the south seems quite relaxed about Fianna Fail’s recent past, why should it fret over Sinn Fein’s imminent future?"
Ed Moloney also wrote:
"While none of the South’s political parties are exactly snow white when it comes to corruption allegations there is a difference. Corruption in parties like Fianna Fail tends to be centred on individuals such as Charles Haughey, while the evidence from the Spotlight probes suggests that in the case of Sinn Fein it is both wholesale and centralised and that implicitly it is being directed as part of a political strategy."
"A Sinn Féin spokesman said the party “keeps in regular communication with our supporters abroad” and that over the past 18 months had engaged in meetings with supporters from North America.
“The focus of the meeting was investment, job creation and economic issues,” the spokesman said.The American approach is low tax, low spend:
"A number of businessman had “a classic American approach to economics in that they would prefer lower taxes and lower spending on public services,” said a source with knowledge of what was discussed.The Sinn Fein approach is the “European” one, euphemism for high tax, high spend:
"We explained we had a more European approach and believed in funding public services,” added the source, who is close to the party."Liam Clarke wrote in October 2014:
"Parties often make unrealistic promises in opposition, but then cut their cloth in government. We have seen it with the Irish Labour party and we have seen it with the Lib Dems in Britain. Government brings its own disciplines.
What is special about Sinn Fein is that it is in government and opposition all at once. If it is promising to end austerity in one state, it can’t very well be seen to be making tough decisions in the other. It is trying to live up to the promises it makes in opposition in the Republic through its behaviour in government in the north."He continued:
"Sinn Fein maintains that if we controlled more “fiscal levers” – in other words, if we had more powers over taxation – then we could pay for everything we need. The party demands that the Treasury give us an accurate account of what is raised in tax here and what is spent, the suggestion being that the two could somehow be made to balance.
It is true that there are no definitive figures for this, but there are independent estimates which tend to concur.
The Institute of Fiscal Studies found that, per head, tax raised here is around 23% less than the UK average. In Wales the figure is 26% below the average. The institute commented: “Wales and Northern Ireland have less income and wealth than the rest of the UK and correspondingly raise less revenue per person from all the main taxes on earnings, savings and profits. Income tax, National Insurance contributions, corporation tax, capital gains tax, inheritance tax and stamp duties all yield at least 25% less revenue per person in both Wales and Northern Ireland than in the UK as a whole.”
Since public spending is higher here, the obvious conclusion is that we would have to raise taxes by over a quarter if we wanted to even stand still in terms of maintaining services.
Sinn Fein says we could save by not contributing to the British armed forces, but the World Bank reports that military spending was only 2.3% of GDP in the UK in 2013, and there have been cuts. Clawing back our share of that relatively small proportion of the national budget is not going to make a significant difference.
Our own Department of Finance also produces detailed balance sheets, the most recent of which concluded that in 2011-12, Northern Ireland was running at a deficit of £9.6bn.
Making up that shortfall from local taxation would ruin us and result in mass emigration.
In the Republic, Sinn Fein proposes more modest tax rises for the rich (48% income tax), as well as increases in the levies on betting, on sugary sweets, on alcohol and on mineral prospecting, which would, they say, bring in £1.33bn out of a population more than twice our size. There is no way this Sinn Fein tax strategy could raise the £9.6bn or so we are currently subsidised by in Northern Ireland, never mind finance increases in spending
Our rights to borrow are very limited, but if they were extended we could conceivably make up the deficits by raising bonds against future tax revenue and public assets. In the Republic, Sinn Fein’s reaction to the last debt crisis was to say that it simply shouldn’t be paid back because the country couldn’t afford it.
Sinn Fein is scoring 24% support in the latest polls in the south and 24.9% in the north. If these numbers hold good until the Irish election in 2016, and if Stormont survives that long, they could put Sinn Fein into coalition on both sides of the border on the centenary of the Easter Rising.
That could be presented as a concrete step toward Irish unity, allowing republicans to run cross-border bodies from both sides and to deal with the British government on a state to state basis. That is the great prize towards which Sinn Fein is straining and it would be a crowning glory of Gerry Adams’ leadership of the party.
But is it luring Sinn Fein into fantasy economics? Is the party writing cheques which are destined to bounce if the electorate ever attempts to cash them?"Sinn Fein president met with the president of Goldman Sachs, Lloyd Blankfein, read the Goldman Sachs report on Sinn Fein here.
The Anti-Austerity Alliance said that Sinn Fein talk about coalition with Fianna Fáil and Labour will cause concern with those who want change. The Alliance also said that “Fresh Start” demonstrats the willingness of Sinn Fein to implement austerity. The Alliance also impugned the party for assenting to dropping the rate of tax corporations pay, and assailed the party for sectarianism:
"Sinn Fein are based on one community and the party’s actions deepen sectarian division."
David Patrikarakos wrote:
"Nonetheless, Varoufakis continued to play chicken, and Greece continued to lose. Throughout early to mid 2015 Greece faced repeated demands to implement harsh fiscal measures in order to receive various tranches of bailout funding. Without the money it faced default, and with it the possibility of Grexit. Each time there was drama. Each time it was a struggle. And each time Greece only just about survived.
Things eventually got too much for Tsipras and in late June, seemingly out of nowhere, and to the rage of Greece’s creditors, he called a referendum. Ostensibly on the question of the latest EU bailout proposals, it was in reality a vote on austerity itself. The Greeks duly voted ‘No’ and Tsipras, duly armed with a popular mandate from his people went to Greece’s creditors – and duly capitulated.
This was perhaps what can safely be described as the turning point for Syriza and Tsipras himself. With the Greek people behind him, he could have chosen to fight but he had learned the lesson of the previous months: the mouse could not roar. It was either come to an agreement or see his country kicked out of the Eurozone. The consequences of the latter scenario were so disastrous for Greece that Tsipras jettisoned almost all his personal ideological baggage and made a deal, even agreeing to creditor demands to get rid of Varoufakis, who resigned shortly after the vote. He chose the national interest over the party line. He acted like a leader.
In true Greek style, events continued with characteristic drama after the referendum. Tsipras was forced to call another election to give himself a fresh popular mandate after going against the referendum result and accepting the new bailout measures. The enraged hard left within Syriza broke off to form its own party, and managed to win zero seats in parliament. Tspiras won the election comfortably.
If there is one lesson to take from Syriza’s first year in power it is, as I have written before, the story of a man who comes to value pragmatism over ideology; the interests of the wider electorate over the dictates of rigid leftist orthodoxy. It is, in the end, an admittedly fraught yet uplifting story and one that Jeremy Corbyn’s Labour would do well to heed if it ever seriously wants to compete at the ballot box. Tsipras learned – the hard way – that government is different to opposition; that mere protest is insufficient to safeguard the well-being of your people. He learned what Corbyn singularly refuses to understand: the practice of politics does not take place on the pages of colossal, dusty Marxist texts but in the real world, with all of its petty betrayals and grubby compromises."Vincenzo Scarpetta wrote in Open Europe (re: letter at top):
"The Portuguese government has until tomorrow to provide its clarifications. The Commission is then expected to make a decision early next month. Generally speaking, this episode is yet another illustration of a familiar dilemma in the Eurozone periphery. Political leaders who fought successful election campaigns on a ‘Yes to the euro, No to austerity’ platform inevitably face a reality check after they enter office.
Compared to Alexis Tsipras in Greece, Costa’s rhetoric was far less inflammatory – but his pledge to “turn the page on austerity” in Portugal was just as unequivocal. The Commission’s letter was the first reminder to the new Portuguese government that Eurozone membership and austerity are not easily separable. I am pretty sure that it is not going to be the last."Ed Moloney wrote in November 2015:
"Last March, around the St Patrick’s Day celebrations in New York, I published a blog post noting that during a lunch for Hillary Clinton, hosted by Niall O’Dowd, the editor/publisher of The Irish Voice, Goldman Sach’s CEO, Lloyd Blankfein, sought out Sinn Fein president Gerry Adams, one of the honoured guests, for a private chat.
The context was a revolt led by Greece’s Syriza party against the Anglo-German austerity policies in Europe and a presumption on the part of many who knew no better, that a Sinn Fein role in the next Irish government could plunge Europe into an even deeper crisis.
Adding fuel to the fire was an imminent internal Goldman Sachs report predicting that SF would take a radical line opposing austerity in Ireland, hitherto the most amenable EU member vis-a-vis austerity.
Hence the interest of a worried Blankfein in what was really in Gerry Adams’ mind. Was he going to follow Syriza or the Spanish party Podemos and plunge Europe into an economic maelstrom with alarming implications for Goldman Sach’s profits and Blankfein’s annual bonus? Or not? This is what I wrote:
I understand that on the periphery of the Hillary Clinton lunch in New York hosted on Monday by Niall O’Dowd, the wannabe Irish ambassador for the next Clinton White House, Gerry Adams had a ten-minute tete-a-tete with Lloyd Blankfein, CEO of Goldman Sachs.
It would be sensible to presume that Blankfein wanted to get his own take on the leader of the political party which was about to be described as the greatest single threat to Ireland’s economic future by his Chief European economist, Kevin Daly.
The report, which warned that Sinn Fein in government could well take the same stance on Ireland’s debt as Podemos does in Spain and Syriza once promised in Greece, was published a day or so later so presumably Blankfein, whose Goldman Sachs empire was once memorably described by journalist Matt Taibbi as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” did not have the opportunity to influence Daly’s report.
A pity for Sinn Fein because according to reliable sources Blankfein later told friends that he had been “greatly impressed” by the Sinn Fein leader, and “re-assured” (by what he had heard).
It is in that context that I recommend that you read a statement issued yesterday by Eamonn McCann and the ‘People Before Profit’ party, critiquing the latest peace process deal between Sinn Fein and the DUP. I doubt whether Lloyd Blankfein, reading this, would think that Gerry Adams had misled him much back in March.
Read it here:
Eamonn McCann of People Before Profit:
“Sinn Fein has now joined the ranks of the austerity parties.”
Staying in government with the DUP took precedence over standing by the most vulnerable. The worst-off people in deprived places like Derry will be hardest hit. People Before Profit’s Eamonn McCann: “If the Coalition in the South introduced this sort of package, Sinn Fein would be elbowing its way to the front of street protest.”
Eamonn McCann: “This deal underlines the necessity of a radical alternative to the DUP, SF and other parties of the status quo.
People Before Profit will be offering this alternative in the forthcoming Assembly election. We need an election asap – and the election of people with different politics.
“It is typical of the deal that new money has been found for a fresh attack on social welfare “fraud”. Welfare fraud is tiny in the North.
The real scandal lies in the huge tax frauds of the big corporations and the super-rich. The Tories should have been told to sod off and sort that out before coming after people in Derry doing the double.
Under the deal, the Assembly will agree not only to the welfare cuts introduced in 2012 but also to the new cuts currently before Westminster. These will see a benefit cap of just £20,000 per annum for families with children – leaving many unable to meet basic needs. It is overwhelmingly children who will suffer.
The new deal includes cuts to all working age benefits, including Job Seekers Allowance, Housing Benefit and even Employment and Support Allowance – a benefit for people found unfit for work. The already miserly rate for each of these will be frozen for four years, while tenants in social housing will see a one percent year-on-year cut to their Housing Benefit. This is all on top of the cuts to Tax Credits, over which Stormont has no control.
Disabled people will see their incomes slashed, as Disability Living Allowance (DLA) ends and is replaced by the Personal Independence Payment (PIP).
The Department for Social Development has admitted that a full 25 percent of people currently receiving DLA will not receive anything under PIP, while a further 33 percent will receive a reduced award. Public sector staff numbers are already down by 5,210. A further 2,200 employees are to be pushed out before March 2016. By 2018, some 20,000 public sector jobs will have gone. Just like Labour in the South, Sinn Fein defends itself by saying the job losses are “voluntary”.
But when managements start putting on the squeeze, there can be a thin line between compulsory and voluntary. Moreover, the loss of so many jobs will have a devastating effect on hospitals, schools and wider public services.
Eamonn McCann: “No genuinely anti-austerity party would have signed up to this.”
The DUP/SF plan also involves “challenging cost reduction targets for each of the nine new departments’”. That means more austerity. The agreement is full of the sort of coded neo-liberal language found in austerity programmes all over Europe. Take “structural reform” in health education, housing and justice – that’s code for outsourcing and privatisation. Despite the rhetoric about taxing the rich, DUP/SF have signed up to a reduction in Corporation Tax to 12.5 percent from April 2018.
This is a bonanza for big corporations. It means a cut of 7.5 percent in their official tax rate. But even this disguises the reality of enormous tax subsidies to the corporations. In the South, the official rate is 12.5 percent but the actual tax paid by corporations amounts to only 5-6 percent. We can expect similar scams in the North – meaning even less money for public services.
The only issue that SF propagandists can claim a concession on is the bedroom tax, which will not affect current tenants. This measure acted like a lightning rod for anger against the welfare cuts generally. Protecting current (but not future) tenants from the tax helped give DUP/SF political space to endorse the overall welfare cuts package.That might provide cover, but of the fig-leaf variety.Parties should stop talking out of both sides of their mouths.
In the coming weeks, People Before Profit will be challenging Sinn Fein members and supporters to take a different road."Ed Moloney wrote a piece in February 2016, 'Now We Know Why Lloyd Blankfein Felt Re-Assured By Gerry Adams…':
Regular readers of this blog will be aware that I have, more than once, made mention of an infamous tȇte-à-tȇte between SF President Gerry Adams and the Goldman Sachs CEO, Lloyd Blankfein, that took place on the margins of a Hillary Clinton love-fest organised by Irish Voice publisher Niall O’Dowd in Manhattan last St Patrick’s Day or thereabouts.
My impeccable source for this story, who must remain unnamed, told me that Blankfein asked Gerry Adams for a private chat and ten minutes later emerged to tell friends that not only had he been impressed by the Provo chief but ‘re-assured’.
Re-assured about what, we can only guess at. Well, actually that’s not too difficult.
Researchers at Goldman Sachs were about to publish a report voicing concerns that if Sinn Fein did well in the next Irish general election they might well follow the example of Syriza in Greece and Podemos in Spain and threaten to stop bailing out the banks.
Naturally, Blankfein would have worried about this, knowing that if Sinn Fein went down this road others might be tempted to follow suit with possibly disastrous financial consequences for Goldman Sachs.
Sinn Fein’s inclusion in the group of small but increasingly popular radical European political parties opposed to the austerity policies that accompanied/facilitated the bank bailouts, had been a source of growing concern for the world’s elites, as evidenced in this 2012 Financial Times piece headlined: Sinn Fein joins Ireland’s austerity backlash.
Explaining that his party’s route to power in Ireland could come via a public backlash against austerity policies, the SF chief told the paper:
“It may not be a rush to the barricades but there is a slow revolution taking place,” Mr Adams told the Financial Times in an interview.
It is hard to read the following analysis, taken from the columns of yesterday’s Irish Times, of the Sinn Fein election manifesto for the general election later this month and not conclude that the re-assurance Blankfein sought and got from Mr Adams was to the effect that there was no reason to worry about overheated newspaper articles like that.
Gerry and the boys would see that the banks were looked after. No Syriza nor Podemos are Sinn Fein. Well, actually, maybe Syriza…….
I have argued many, many times in these columns and elsewhere that you cannot begin to understand Sinn Fein unless you realise that politically it is a chameleon. It believes in nothing, has no ideological roots and loyalties, can hold one view one day and a completely different one the next, and that the stance it decides to take is determined solely by its potential to attain one overriding objective: power and the office that comes with it.
Like a chameleon, Sinn Fein changes its colours to suit its environment. So it has been with the Irish banks and the bailout."
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