President and Delegates. The misguided public policy of one-sided austerity, which reflects the culture and the interests so dramatically revealed in the Anglo Irish tapes has utterly failed, inflicting misery on the peoples of Europe in the process. The irrational combination of a coordinated contraction across an entire continent, accompanied by the most savage assault on citizens and particularly on working people since the Second World War is the wrong response for the wrong crisis. Indeed, it could still threaten the break-up of the euro zone and the destruction of the democratic system itself. It is now acknowledged even by many of the most ardent adherents of unbridled free marketeerism that this is no mere recession, but a systemic crisis of capitalism itself. It is far from over, notwithstanding the relative stability of the bond markets. This is not due to any inherent improvement in the real economy. Indeed, the case is very much the reverse. There is no prospect of a renewal of sustained growth in the absence of a radical policy shift at EU level. Such a departure will not occur until the pigeons come flocking home to roost on the order books of German manufacturers. Meanwhile, the fate of our young people, our communities and societies, remains precariously perched on the precipice of disaster. In this jurisdiction, the strategy threatens to undermine the very stability of the Peace Process itself as opportunities for the young diminish, hopes are dashed and the standards of living deteriorate. It is a particularly reckless policy on the part of the UK government, which retains its own currency and the economic capacity to embark on a better course. Simultaneously, the Republic remains firmly in the grip of the Troika strait jacket, the consequences of which are clearly reflected in last Thursday’s depressing statistics from the CSO. There is no disguising the truth anymore. The economy has been declining at an accelerating pace since the middle of last year. The recipe simply does not work. Ironically, there is now only one slim prospect of achieving the 3% deficit target by the end of 2015 – and that is by immediately abandoning one-sided austerity. We are faced with cutting the gap between income and expenditure by about €7.3 billion, (if the economy doesn’t fall further in the interim). The plan envisages achieving this through €5.1 billion in further cuts and taxes with the remaining €2.2 billion being generated through growing the economy at a cumulative nominal rate of 5.5% over the next two years. There isn’t the remotest possibility of this happening on the basis of the present policy. The only avenue available is through dramatically ramping up the domestic economy. But it can actually be done. It can be done by deploying the breathing space afforded by the promissory note deal to offset further cuts, accompanied by a major campaign across all departments and public institutions to lever in the €6 billion which has been re-designated from the National Pension Reserve Fund for strategic investment creating tens of thousands of jobs in the process. We have been calling for this since May Day 2011 and it is difficult to understand why it has not been done – but better late than never. In parallel with this, the Fine Gael Party must lift its veto on a tax contribution from wealth and those on high incomes to generate a further €1 billion over two budgets. Such an approach offers the possibility of achieving the 3% target and sparing our people further misery, if we get a deal on the retrospective re-capitalisation of the banks in accordance with the agreement of the European Council on the 29th June last year. This way we can buy the time it will take for the trade union movement and civil society to mount the challenge that will bring about a more enlightened policy at European Union level – and this is the only way that it can be done.
SIPTU President Jack O’Connor's speech on the economy at ICTU Conference
