CONGRESS SAYS NO RETURN TO 'BUSINESS AS USUAL', SLAMS 'CORPORATE WELFARE' FOR BANKS
15 May 2009
Congress General Secretary David Begg has said that in order to get to grips with our current economic difficulties there had to be a realisation that there would be no return to 'business as usual'. In a speech to the Mental Health Ireland Annual Conference in Athlone, Mr Begg also slammed the corporate welfare doled out to the banking sector and contrasted it with the shabby manner in which SR Technics workers had been treated.
"The world of the last three decades has gone," Mr Begg said. "The global financial system exploded in 2007. The financial system is the brain of the market economy and the driving force for globalisation. The collapse of Lehmann Bros. Bank on September, 22, 2008 was a moment akin to the collapse of the Berlin Wall.
"The consequences for the real global economy are evident in the 23 percent collapse in global trade in the first quarter of 2009. As a small open economy Ireland is totally exposed to this," he said.
Mr Begg pointed out that there seemed to be an expectation that Ireland could 'bounce back' to the type of growth it had in the first half of the decade but, he said, this is not going to be a short 'v-shaped' recession. On the contrary Ireland was unlikely to recover until the global economy recovered and that would require, in addition to a re-engineered and properly regulated global financial system, a rebalancing of trade, deleveraging of private sector debt in the West and dispersal of the savings glut in Asia. There was as yet no evidence that this rebalancing is seriously underway.
In the meantime the country was seeing a huge collapse in employment likely to lead to an unemployment rate of 16.8 percent in 2010. "We need to deploy the resources we have towards ensuring that the burden of economic adjustment is mitigated to the greatest extent possible and borne by those with the broadest shoulders. That is what other countries are doing. That is what the Congress 10 Point Plan for a Social Solidarity Pact was intended to achieve," he said.
Mr Begg observed that while few people understood the complexity of the bank recapitalisation programme, many were distinctly uneasy about the vast resources being burned up implementing it. He characterised it as "the biggest Corporate Welfare cheque ever written" and said it was sadly ironic that on the day €3.5 billion was injected into AIB, we saw the demise of SR Technics for want of just €20 million.
"The time has come to put some balance into our national response to the crisis," said Mr Begg. "We need to find resources to keep people in employment. It is a false economy to let them fall into long term unemployment. Likewise we need to ensure people don't lose their homes through losing their jobs and that pensions that people contributed to all their lives are there for them when they retire".
He argued that the 10 Point Plan was a modest and rational demand on Government by citizens who were in real distress. "People are entitled to expect the state to protect them in times of crisis" he concluded.