The news from Ireland this week is that the prime minister has caved in and agreed to accept $84 billion dollars in bail-outs from the IMF and European Union after all. The Irish people protesting daily outside the Irish parliament don’t really believe this. They contend Prime Minister Brian Cowen intended to accept the money right along but was just being coy about it.

The price of accepting the bail-out – as always – is massive social service cuts. Ireland has agreed to austerity cuts in social services totaling $20 billion over the next four years. This includes a 10 percent cut in pensions, pay cuts for public employees,  a reduction in the minimum wage, as well as cuts in child welfare and public health. Unlike the American public, the Irish seem to know when they are being screwed. They know that the two-thirds of Ireland’s current debt stems from bank bail-outs. And that the bail-out isn’t for their benefit, but to protect their 100 billion pound loans from German and British banks. Iceland saw no problem with defaulting on loans from the British banks who helped create their real estate bubble, and Irish unions and pensioners don’t see why Ireland can’t do the same.

Massive Street Protests

In addition to the daily protests outside Parliament, the Irish trade unions are organizing a major demonstration this Saturday and on Budget Day, when Cowen will try to pass an emergency budget, December 7^th.

It also looks like Ireland’s current government may collapse. Their Green Party, which is part of the governing coalition, has announced their intention to withdraw in January. At that point Cowen, who will no longer control a majority of votes and because he will be unable to pass new legislation and will be forced to control a new election.

This is one of the best aspects of Parliamentary democracy (the type of government in most of Europe – and in New Zealand). When government leaders do something really stupid, they usually lose their majority in Parliament and are forced to call a new election. A situation like we have in the US, where Congress is stalemated for years at a time, and reform legislation just sits there in committee, can’t happen in Europe.

Advantages of Parliamentary Democracy

People who have studied the framers of the US Constitution know that our founding fathers were extremely pro-business and deliberately set up two legislative bodies to build that stalemate into our government. In fact they deliberately created the Senate (which prior to 1913 wasn’t elected by popular vote) to make sure the more democratic House of Representatives didn’t get carried away in passing popular reforms that weren’t favorable. The stuff they cram down our throats in school about the importance of “checks and balances” is a lot of hooey (euphemism). It was specifically designed to protect business interests.

Sinn Fein, one of the Irish opposition parties, has introduced a “no-confidence” motion. If this passes, it could bring Cowen’s government down before December 7^th.

Portugal is Next

Now that both Greece and Ireland have agreed to bailouts and extreme austerity measures, the spotlight is now on Portugal (which also faces a higher rate of interest on the money it borrows from Wall Street). However Portuguese unions have been very pro-active in shutting the country down with a general strike. There were also massive street protests yesterday in Britain and Italy.

---