Ten Years After the Troika: No Return to Austerity!

It is surely the bitterest of ironies that a mere ten years after the arrival of the Troika in Ireland on 28 November 2010, our society faces yet another profound economic crisis. While it remains to be seen if the impact of COVID-19 exceeds the 2008 bank collapse, the effects of the latter are still being felt.

2008 Bank Collapse

Throughout 2008 the global financial system staggered towards collapse as tens of trillions of fictitious transactions came apart. In March 2008 the US merchant bank Bear Stearns collapsed. The previous year the Northern Rock bank in the UK had collapsed. Anglo-Irish Bank and the other Irish banks were fatally exposed as 2008 progressed.

The crisis hit with a vengeance in September of that year and by the end of that month the Irish government had guaranteed the debts and deposits of the Irish banking system to the tune of EUR 440 billion. This proved to be colossal blunder. In the following two years, the implications of this decision pushed the then Fianna Fáil/Green Party coalition into increasingly savage attacks on the working class in an effort to keep the banking system afloat.

Austerity Measures Lead to Troika Bailout

Huge tax increases were imposed on workers in the guise of the Universal Social Charge (USC); huge pay cuts were imposed on public sector workers in 2009 and 2010; emergency budgets took tens of billions of euro out of the Irish economy and dramatically worsened the economic crisis. But by the end of 2010 the Irish establishment had run aground on rocks of its own making and went, cap-in-hand, for a bailout from the ‘Troika’ of the European Union, European Central Bank and International Monetary Fund.

The resulting Memorandum of Understanding was a programme of vicious austerity. The incoming government of Fine Gael and Labour enthusiastically implemented this programme following the decimation of Fianna Fáil and the Green Party in the February 2011 general election. Despite the Troika’s programme being an explicit attack on the working class and the public services which underpin living standards, the leadership of the Irish trade union movement, with some few honourable exceptions, passively accepted it when it was first announced.

Fine Gael and Labour coalition implements Troika austerity from 2011

From 2011 onwards attack after attack was launched. The Local Property Tax, further cuts to public sector pay and terms and conditions; deep cuts to health services and education; and, an end to public house building, to name just a small number of these attacks. It wasn’t until 2014 with the emergence of a mass working class movement against the introduction of the water charges mandated by the Troika’s programme, that serious resistance was brought to bear.

That time a small but influential section of the official trade union movement threw its weight behind working class resistance to the water charges, making a crucial difference. Along with the socialist Left this movement sustained its resistance through regular mass demonstrations, street meetings and mass non-payment, to win victory in 2016. The incoming government that year abolishing water charges.

This was the sole major victory against the Troika’s 2010 progamme and it showed the combined importance of the trade union movement and the socialist Left but above all else the power of a mass movement of working class people. Despite their huge electoral advances in the general election of February earlier this year, Sinn Fein as a party stood aloof from these movements during the austerity years. For instance, they refused repeatedly to endorse crucial tactics such as mass non-payment of the water charges or local property tax.

Lessons for workers’ facing post-COVID cuts

As we face into possibly more years of austerity following COVID, the ten-year anniversary of the Troika’s arrival in 2010 provide some lessons for how the working class can organise to resist.

Firstly, the importance of trade unions. These are a crucial potential bulwark against further attacks on workers. The current leaderships will, in all too many cases, refuse to face up to their responsibilities to stop establishment attempts to make worker’s pay for COVID. Workers need to join unions and if members of unions get active in their structures to organise opposition to post-COVID attacks against the working class. The politics of respectability, which dominate thinking in too many parts of the trade union movement, offer zero protection to workers facing class warfare from the establishment.

Secondly, workers need to distinguish between verbal opposition to austerity from political groupings, and actual political opposition. Sinn Fein face a huge challenge in this regard. An establishment that is determined to make workers pay for COVID must be faced down. Civil disobedience, blockades and so-called ‘illegal’ strikes, will be crucial tactics in the battles ahead. Sinn Fein must choose which side they are on: that of the working class, or that of the hurlers on the ditch who are opposed in words to austerity but who do nothing practical to stop it. Fine words in the Dáil are no substitute for opposition in the streets.

Thirdly, mass movements, organisation, opposition, solidarity, protest and civil disobedience win! The trade union movement was built with these methods. The water charges were defeated in 2016 by these methods. We can win with them this time, too!

Finally, COVID illustrates, like the great financial crash of 2008, and the austerity years that followed, that capitalism is a system of permanent crisis. It needs to be urgently replaced by a socialist system the recognises the ecological limits of our planet. In 2020 we know more about these limits than we did in 2008. Such a sharp transition is impossible without a revolutionary perspective. Militant Left stands for that revolutionary leap from continued capitalist barbarism to a sustainable socialist future.

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