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Marshall Auerback Sees Little Hope for Ireland under Fine Gael

Even With a New Boss, Ireland’s Prospects are as Bleak as the Potato Famine

Marshall Auerback warns that Fine Gaels plans for economic recovery will not deliver  without repudiation of bank debt and a real delivery of new jobs in New Deal 2.0. See especially his call for a Job Guarantee Programme.  Smart Taxes holds that environment and ecosystem protection could provide the bulk of a Job Guarantee Programme.  An indicative list might include ; invasive species eradication on land and in water, wetland and peatland restoration, forest and hedgerow planting and maintenance, flooding mitigation and adaptation, resilience plans for rural and urban settlements, allotment development, retrofitting local authority housing for energy and water efficiency.  This does not count more conventional private and public investment in distributed renewable energy and shared transport systems needed to transfuse the economy

He says that Fine Gaels policies are …

In other words, more of the same neo-liberal nonsense that has driven the country to the precipice.

With unemployment now standing at 15% of GDP, one of the largest cumulative contractions ever recorded in Irish history, the EU/IMF “rescue package” has surely hammered the final nail into the coffin of the Republic of Ireland. The country is being saddled with a punitive 5.8% interest rate on a multi-billion euro loan, which will largely be used to repay German, French, and British bondholders. Irish taxpayers, by contrast, receive nothing.

As Argentina demonstrated in 2001, sovereign governments are not necessarily hostage to global financial markets. They can steer a strong recovery path based on domestically orientated policies — such as the introduction of a Job Guarantee program — which directly benefit the population by insulating the most disadvantaged workers from the devastation that recession brings.

….By divorcing fiscal and monetary authorities, they (eurozone countries)  have relinquished their public sector’s capacity to provide high levels of employment and output. Non-sovereign countries are limited in their ability to spend by taxation and bond revenues, and this applies perfectly well to Ireland, Portugal and even countries like Germany and France.

… The only way out of the current mess is not through more of the same tired neo-liberal nostrums being offered up by Fine Gael, but the imposition of a loss on bondholders. These are the same who engaged in speculative financial activity yet continue to demand unlimited compensation off the backs of the Irish people for their gambling losses. Until this step is taken, Ireland hasn’t a hope of stabilizing its finances, and its prospects are as bleak as they were during the potato famine.

Marshall Auerback is a Senior Fellow at the Roosevelt Institute, and a market analyst and commentator.

Posted in News, Resilient Investment.