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Pre-2015 articles and interviews

by Admin

Collusion and cover-up in Loughinisland massacre

The scene after six Catholic men were killed by a UVF death squad as they watched Ireland play Italy in the World Cup in 1994

The scene after six Catholic men were killed by a UVF death squad as they watched Ireland play Italy in the World Cup in 1994

Published in An Phoblacht on 17 September 2009 

A Police Ombudsman report is expected to confirm state collusion and cover-up in the  Loughinisland massacre, in which six Catholic men were killed by a UVF death squad as they watched Ireland play Italy in the World Cup on 18 June, 1994, in the Heights bar in the small Co Down village.

It is expected that in addition to confirming “major failings” by the police to properly investigate the Loughinisland attack, the report will reveal that four RUC Special Branch agents were aware that the UVF was planning the massacre.

Eamon Byrne (39), Barney Green (87), Malcolm Jenkinson (53), Daniel McCreanor (59), Patrick O Hare (35) and Adrian Rogan (34) suffered multiple gunshot wounds in the back as they sat watching the game after two masked men stormed into the pub and fired up to 30 bullets from an AK-47 and a Czech-made rifle into the patrons. No-one has ever been convicted of the brutal sectarian rampage, which devastated the quiet village of Loughinisland and left nine children without a father.

The report is the outcome of an Ombudsman review into failings by the RUC/PSNI to properly investigate the massacre, launched after the victims’ families filed a complaint in 2006 following revelations by investigative media reports that the getaway car was supplied by an RUC agent. Originally scheduled to be published last summer, the report was delayed and was due to be released on Tuesday 15 September – but the Ombudsman has now delayed its release for a second time, “for several weeks”, claiming new information must be assessed.

The delay has caused more frustration for the families in that “new evidence” coming to light only days before the scheduled release of the report indicates either a failure of the Ombudsman’s investigation or else simple stalling on the release of what will inevitably be damaging information.

‘Major failings’

The families’ 21 March 2006 complaint to the Ombudsman included the allegations that:

•The investigation into the murders has not been efficiently or properly carried out;

•No earnest effort was made to identify the persons that carried out this atrocity; and

•There persists a suspicion of state collusion in the murders.

Specifically the families demanded to know if any of the suspects were working for Special Branch and why the car used by the killers to get away was subsequently destroyed by police.

Other concerns were the fact that a viable hair follicle was recovered but nobody has been charged, and the fact that investigators reported at least one of the weapons used was imported from South Africa by British intelligence’s Force Research Unit agent Brian Nelson.

A draft public statement on the investigation by the Police Ombudsman from 21 July, supplied to An Phoblacht, states the complaint that the investigation by the RUC/PSNI has not been properly carried out will be upheld.

“Major failings have been identified. There was a failure to speak to persons of interest. There was a loss of policy logs,” the draft statement says. It says the allegation that no earnest attempt was made to apprehend those responsible will be partly upheld due to the “unavailability” of police logs and interview notes. Some suspects were swabbed for DNA samples while others were not.

The draft statement also confirmed that there was no contact recorded between the RUC/PSNI and the victims’ families between 1994 and 2005 and that there was a consistent failure to update the families on developments.

Special Branch agents

Police sources revealed to the media last weekend that the investigation’s report will reveal the role of four Special Branch agents within the UVF in ordering or organising the attack. The report will mention but not name the agents; however, it has already been established that Mark Haddock and Terry Fairfield were two of the agents involved.

The RUC knew that Fairfield, an agent handled by Detectives Johnston Brown and Trevor McIllrath, provided the getaway car, a red Triumph Acclaim, used in the attack but he was not arrested and continued to work for Special Branch following the massacre.

Car destroyed

The most glaring evidence of a cover-up is the destruction of the getaway car by the police in 1996 – supposedly because of “overcrowding”. The RUC claimed it carried out forensic tests on the car in 1994 and found no useful evidence. In their complaint, the families said: “The car may have retained the prospect of evidential product in the context of developing science. It is wholly unsatisfactory and unreasonable that this crucial exhibit was wilfully destroyed by the police.”

The Ombudsman’s draft public statement acknowledged the destruction of the car “was a breach of police procedure at that time” and “it should not have been destroyed”.

Kevin Winters Solicitors, representing the families, wrote to the Ombudsman in October 2007 that the families had been advised by Detective Williamson on 11 October 2005 that “all aspects of the trail” relating to the car had been followed up in 1994 and he was “satisfied” with it.

The families’ solicitors said: “It is unacceptable that the PSNI, 11 years on in October 2005, attempted to gloss over the history and facts of this car as being a line of enquiry which was satisfactorily pursued, without recourse or mention to the involvement of one of their agents.”

Weapons’ history

At a meeting between families and the PSNI on 11 October 2005, DI Wilson said that the rifle used in the attack “was a Czech-made weapon that was one of the weapons that came to [the North] from South Africa in the late 1980s” – in the weapons consignment effected by FRU agent Nelson. DSI Williamson said at the same meeting that three murders and two attempted murders, all attributed to the UVF, had been carried out using the same weapon.

The Ombudsman’s draft statement says: “In 2006 a forensic review [of the weapons] was taken by [the PSNI’s Historical Enquiries Team] and PSNI Serious Crime Branch. It has not progressed and is a substantial failing by police.”

The families want to know which specific murders these weapons can be traced to; whether or not there was evidence of state collusion in these murders (including any evidence they came from the Nelson consignment); and whether or not there has been any prosecutions for the other attacks.

Failings and contradictions

While the Ombudsman’s report has yet to be released and the Loughinisland families reserve their assessment of its findings until it has been published, the draft statement shows several failings in the approach of the Ombudsman’s investigation and contradictions between its findings and its conclusions.

It claims in the provisional statement that the allegation of state collusion has not been substantiated; that there was “no preventability” – but clearly if at least four Special Branch agents knew of the massacre plans, and were directly involved, the RUC would have had prior warning the attack was going to happen if not a direct hand in it.

The fact that the report confirms a cover-up to protect agents, including the deliberate destruction of evidence, itself confirms collusion in the massacre.

The draft statement says there is no evidence linking Nelson or the South African consignment to the weapons used in Loughinisland, contradicting the previous statements made by investigating officers – and then goes on to say that the failure to establish the ballistic history is a “substantial failing” by the police.

The Ombudsman’s office failed to arrest and question the handlers of the agents involved, or the officers responsible for the destruction of evidence and says there is “no evidence of crimiality” on the part of police.

However, whether there is the basis to prosecute those responsible for the collusion and cover-up will be one of the issues that can be judged by the victims’ families on the publication of the Ombudsman’s final report.

by Admin

Disaster developing in Sri Lanka’s Tamil camps

Tamils at Kadirgamh camp

Tamils at Kadirgamh camp

Published in An Phoblacht on 27 August 2009

 A humanitarian catastrophe has been escalating over the past three months in the internment camps   in which 285,000 Tamil civilians have been imprisoned in Tamil Eelam in the north of the Sri Lankan state.

Even some Western media outlets have begun referring to these camps – heavily guarded by the Sri Lankan Army (SLA) and ringed by razor wire – by their accurate name: concentration camps. Now the already disastrous conditions for the camps’ prisoners, which include an estimated 55,000 children, are being exacerbated by heavy rains which have caused major flooding.

Since the brutal Sri Lankan Government offensive against the Liberation Tigers of Tamil Eelam (LTTE), which killed more than 30,000 Tamils between January and May when the Government declared victory, Tamil refugees displaced by the war have been rounded up and held against their will in about 30 Government-run camps in the Vavuniya, Mannar, Jaffna and Trincomalee regions in the north.

The Government has said the internees are being held until they have been “screened” for links to the Tigers and has pledged to release 80 per cent of the camps’ populations by the end of the year. But since May only 10,000 refugees have been released. Sri Lanka’s foreign secretary has publicly stated that he believes all Tamils are “with” the Tigers – “at least mentally”.

Rights agencies have reported food, water and medicine shortages and resulting malnourishment among internees. Tamil sources have reported deaths from starvation in the camps. There have been widespread allegations of the systematic rape and sexual abuse of Tamil women and children, and of beatings, disappearances and executions of Tamils suspected of supporting the LTTE.

More than 10,000 Tamils which the Government claims are members of the LTTE have been removed from the camps and imprisoned incommunicado in secret locations without any access to the outside world – or to the rights recognised under international law of prisoners of war.

In the wake of the rains that flooded the prison camps, which hit on August 14, the UN’s Office for the Coordination of Humanitarian Affairs news service IRIN described “a sea of mud and misery”, with tents being inundated with water and toilets flooding waste throughout the camps.

Demanding the immediate release of the 285,000 civilians last month, Amnesty International’s British director Kate Allen said: “The largest camp – Menik Farm – is horrendous. It holds about 160,000 people in an area smaller than one square kilometre.

“The people we are talking about here are doctors, teachers, farmers – ordinary people with ordinary lives. Yet, they are being held in horrendous conditions for no reason other than that they previously lived in areas held by the Tamil Tigers.”

Amnesty said there was a lack of running water and sanitation and severe restrictions on communication with the outside world, with aid workers not being permitted to talk to the internees.

Following the heavy rains, international medical officers raised concerns with IRIN in Vavuniya on 17 August over diarrhoea, dysentery and other waterborne diseases.

“From an epidemiological point of view, this is a public health disaster waiting to happen,” one medical officer said.

“How are we supposed to sleep like this?” demanded Menik Farm internee Ganeshan Sivasundram from outside his flooded tent.

The Government responded to the floods by deploying more troops to secure the camps from “unrest” by crushing the mounting resistance to the mass incarceration.

While these floods have caused huge hardship for the internees, they are only a taste of what is to come, with Sri Lanka’s monsoon season due to begin in October.

As the Sri Lankan Government prepared for an all-out slaughter of the Tamil people in order to inflict what it hoped would be a final defeat on the forces fighting for an independent Tamil homeland, all aid groups and the UN were ordered to leave the northern war zone in September last year – so internationals could not bear witness to SLA atrocities.

‘Genocide’ – defined by the UN as any act “committed with the intent to destroy in whole or in part a national, ethnic, racial or religious group” – is the only word that can adequately describe the onslaught against the Tamil people this year.

In January last year the Sri Lankan Government unilaterally pulled out of a February 2002 Norwegian-mediated ceasefire agreement and vowed to crush the Tigers using military force. In June last year, the Government’s offensive was stepped up, and further escalated in January this year.

Between January and April this year, the UN counted 7,000 Tamil civilian deaths, most caused by SLA shelling and air strikes. While the international body failed to officially reveal the dramatically rising death toll in May, UN sources revealed to the London Times and Paris-based Le Monde newspapers immediately following the end of the war that they estimated 20,000 Tamil civilians had been killed in the final weeks of the regime’s offensive – including 10,000 on one day alone, May 17. The next day the Government declared victory in the 26-year civil war.

The Times reported “internal anger” within the UN over the failure to reveal the death toll, which “had not been made public to avoid a diplomatic storm” and said: “The figure of 20,000 casualties was given to the Times by UN sources, who explained in detail how they arrived at that calculation.”

The de facto state infrastructure established by the Tamils in the north over the past decade has been almost entirely destroyed and ethnic Sinhalese (the majority in Sri Lanka) are being encouraged by the regime to settle in the “depopulated” land of Tamil Eelam as part of a long-running colonisation scheme similar to Israel’s settlement policy in the West Bank.

LTTE leaders who surrendered to the SLA were summarily executed. On August 25, Channel 4 News showed mobile-phone footage of political executions released by Journalists for Democracy in Sri Lanka which was filmed by a SLA soldier in January. It shows a Sri Lankan soldier shooting a young man, who was naked, bound and blindfolded, in the back of the head at point-blank range. The camera then pans out to reveal seven more bodies of bound, naked men, before a ninth is shot dead.

The international community has failed to act in any way to hold the regime to account for the  mass murder of Tamils, including the failure to even insist upon an independent war crimes inquiry. The International Monetary Fund has recently approved a US$2.6 billion (£1.6bn) loan to “rebuild” the country that will directly benefit the regime, which has imposed a 0.9 per cent tax on all foreign aid entering the country.

It has also been revealed this month that the British Government, along with other EU countries, continued to sell millions of pounds worth of arms and military equipment to the Sri Lankan Government over the past three years of its escalating war on Tamils.

Britain sold more than £13.6 million of equipment including armoured vehicles, machine-gun parts and semi-automatic weapons to Sri Lanka, according to official records – including £1.3 million worth of arms during the last three months of 2008, when the regime was well into its latest and most brutal offensive against the Tamil people.

by Admin

Legal figures add weight to Finucane inquiry call

Pat Finucane mural

Published in An Phoblacht on 19 February 2009

THE British Government has signalled it may avoid holding even a controlled inquiry into the murder of Pat Finucane, an international conference in honour of the Belfast solicitor at Dublin’s Trinity College was told on Saturday.

The conference paid tribute to the life, work and legacy of Pat Finucane on the 20th anniversary of his murder. Delegates heard from an impressive international panel of leading human rights activists and legal figures including Pat’s wife, Geraldine Finucane; Canadian former Supreme Court judge Peter Cory; leading British human rights laywer Michael Mansfield QC; and the former UN Special Rapporteur on the Independence of Judges and Lawyers, Param Cumaraswamy.

Addressing the conference, Belfast solicitor Peter Madden, who shared a legal practice with Pat, read from a letter the Finucane family had received from the British Government on the anniversary of Pat’s death.

British Secretary of State to the North Shaun Woodward’s Principal Under-Secretary, Simon Marsh, wrote that the Government was considering the report of the Eames/Bradley Consultative Group on the Past and that “no decision has yet been taken by Government in relation to any of the group’s recommendations, including their recommendations in relation to any Finucane inquiry”.

The letter went on to say: “All these matters, like the outcome of discussions with the Finucane family, or their legal representatives about the form of any inquiry, will, of course, be relevant factors for ministers in deciding whether it remains in the public interest to proceed with an inquiry.” Speaking after the conference, Pat’s son, John Finucane, said that the British Government “appears to be preparing to break promises that they made, not only to ourselves but also to the Irish Government and others”. He added: “The question needs to be asked: just in whose interest would it be not to have a public inquiry into my father’s murder?”

Geraldine Finucane said the family firmly rejects the idea that the past could be swept under the carpet.

“Recent efforts to find mechanisms to address the past underline how important it is that we build our future on solid foundations. The society that forgets its past, or worse, tries to pretend it never existed, is doomed to repeat it.”

Jane Winter from British Irish Rights Watch also voiced her concerns.

“In my opinion, the Eames/Bradley report puts too little emphasis on transparency, too little focus on the truth and too much emphasis on putting the past in the past.”

Madden said that while there while the aspirations towards reconciliation in the Eames/Bradley report are positive, “the way to achieve reconciliation is not through burying the truth”.

Michael Mansfield said he is appalled at the suggestion that holding an open inquiry into Pat’s death would not be in the public interest. “The only ones who should decide what’s in the public interest are the public,” he said.

“The British Government sending this letter on Pat’s anniversary is no coincidence. Well, we will send the British Government a clear message back from this conference: we will not settle for anything less than the full truth because Pat was just the tip of an iceberg of a British policy of systemic collusion – and some of the operative that would be revealed are still operative.

“It’s not just because Pat’s family deserves to know the extent of collusion – as do so many other families – but because there will be no genuine, lasting peace in Ireland until there is justice. And justice must be built upon the full disclosure of the truth.”

Mansfield outlined the drive by the British Government to keep inquests out of the public eye.

The Inquiries Act 2005, which allows the home secretary to issue ‘restriction orders’ on an inquest enabling the withholding of evidence from the coroner, is the “only possible” means for investigating the Finucane case, the British Government insists. It is a transparent attempt to conceal the role of Government security agencies and the political establishment’s role in “controversial” killings.

“Now the new Coroners’ Bill, going before the parliament this year would, if passed, allow for the Secretary of State to decide that inquests should be held in secret if it is in ‘the national interest’,” the QC explained.

“The bill is attempting to resurrect the legislation that was defeated last year in the House of Lords contained in the ‘anti-terror’ 42-day detention proposals. The result would be that, in certain cases, there may possibly be no inquest, or if there is one it will be controlled. There would be no jury, the coroner will be appointed by the Government, the whole thing could be held in camera, with no publication of the findings.”

As she was opening the conference, Geraldine Finucane said: “Pat may have been taken from us far too soon but what he achieved in his short life, professionally and personally, cannot be measured through a mere sum of years.”

Belfast High Court judge Séamus Treacy spoke about the advances in human rights law that Pat’s work, together with Peter Madden, achieved in 10 years of practice.

“In bringing about change in a rotten system, Pat advanced fair trial rights and the right of prisoners to legal recourse against prison governors and the right of access to solicitors.”

Judge Peter Cory paid tribute to the Finucane family: “Geraldine has become an international symbol of courage and dedication to the cause of her husband.”

Former UN Special Rapporteur on the Independence of Judges and Lawyers Param Cumaraswamy said: “Along with everyone else in this room, I deeply admire the courage and determination of the Finucane family.

“I was given an assurance by Tony Blair in April 2001 that there would be an independent inquiry into Pat’s murder – which, eight years on, has not eventuated,” he said.

“Perhaps it is time to refer the case back to the European Court of Human Rights in order to bring pressure to bear on the British Government.”

Param Cumaraswamy also discussed the failure of the British Government, RUC and Law Society in the North to provide protection for Rosemary Nelson, who was murdered in a loyalist car-bomb in March 1999.

by Admin

Wall Street socialism: privatising profits, nationalising losses

Lehman Brothers

Published in An Phoblacht on 25 September 2008

The financial crisis that has gripped the US since July last year, described by the International Monetary Fund as the worst since the Great Depression, reached disastrous new international proportions in the past fortnight as major banks and financial institutions toppled like dominos. The White House appears to have suspended its devotion to the ‘free market’ and stepped in to nationalise huge losses using taxpayers’ money.

The crisis has been triggered by the slump in the US property market, with house prices at their lowest level in 20 years.  The mass default of mortgage and loan repayments that began in 2007 – the so-called subprime mortgage crisis – has left the banks with ‘financial toxic waste,’ massive debts that are unlikely ever to be repaid.

So far this year there have been foreclosures on more than 1 million homes as a result of failure to keep up with mortgage payments.  Business Week warned in July that mortgage-related losses “could cause a trillion dollars in credit to vaporize”. As a result of the popular default on mortgages, the banks have now written off more than $100 billion in assets and several banks have lost at least a third of their capital.

Only two of the five major US investment banks are still standing after Wall Street giant Lehman Brothers filed for bankruptcy on 12 September. A few months earlier, the Federal Reserve Bank (FRB) had invoked a Depression-era law to provide Lehman and other banks with billions of dollars in emergency low-interest loans, but this was not enough to keep it afloat on its worthless mortgage-backed securities and $639 billion in assets vapourised into thin air.

The decision to let Lehman Brothers go to the wall was described by several economists as “an enormous gamble” and shock waves spread around the world economy. Wall Street firm Merrill Lynch was taken over by the Bank of America later that day in order to avoid bankruptcy and the  British Government suspended counter-monopoly measures to allow Lloyds TSB to buy up the faltering Halifax Bank of Scotland (HBOS), sparking fears of the loss of tens of thousands of jobs as the new banking giant cuts costs.

Bailing out the bankers

On 17 September, faced with the collapse of the world’s largest insurance company, American International Group, the US Government handed over $85 billion to prevent it from going under, effectively nationalising the company.  AIG, with its $1 trillion global balance sheet, was “too big to fail”: the repercussions in the US and international economy would have been disastrous.

The bailout of AIG is the latest in a series of rescue packages and nationalisations by the Federal government in the past six months,  starting with the FRB’s decision to fund JP Morgan Chase’s takeover of investment bank Bear Stearns with $29 billion in taxpayers’ money.

The Treasury spent $200 billion nationalising the two key Government-sponsored mortgage companies Fannie Mae and Freddie Mac,  which own or guarantee almost half of the US’s $12 trillion in mortgages.

Each week there seems to be another financial institution collapsing or coming close and the Republican Government, champion of laissez faire capitalism, has intervened in the economy in a way unseen for decades to try to limit the credit infection spreading. In the wake of the Lehman fiasco, US and European banks pumped $180 billion into global financial markets in an effort to stabilise them.

Now in a move that has been described as “the mother of all bailouts”, the Government has asked Congress for $700 billion to buy up “distressed assets” – or bad debt – from financial institutions  and establish what would essentially be a skip for the banks to dump their toxic debt into. It is unclear how the debt would be priced, and what losses the banks would take. Media reports said that Treasury Secretary Henry Paulson resisted calls for the inclusion in the rescue programme of assistance for homeowners facing mortgage foreclosures.

It’s unclear whether these measures will be enough to stabilise the global financial markets in the short to medium term because the growth in the finance sector has seen the rise of a ‘shadow’ banking system, especially in mortgages, that is beyond public scrutiny or regulation: no-one knows where the financial toxic waste is buried.

Speculation

What is clear is that the Wall Street crisis will exacerbate the problems in an already deeply troubled US economy, with falling growth and a falling dollar, the collapse of the property market, rising unemployment and soaring fuel and food costs all symptoms of the unfolding recession.

But where has this financial crash come from? Can it really be just a ‘subprime mortgage crisis’ or the result of a housing slump? And did economists really not see it coming? The bursting of the housing bubble has sparked the explosion of deeper, underlying problems in an economy that has long been running on speculation and mounting debt.

After the 1970s global recession hit, and investment in traditional sectors of the economy like manufacturing became less profitable,  investment in financial assets – shares, bonds, bank deposits and securities – turned into the big profit-spinner. Buying financial assets is investing in a claim on the new profits a company may make in the future, and the stock market is the casino where people can speculate in these claims on future profits.

Between 1973 and 2008, mirrored by the decline in American manufacturing, the financial services sector rose from 12 per cent to 21 per cent of total US GDP. In 1980, world financial assets amounted to 119 per cent of global production; by 2007 that had risen to 356 per cent. But it’s illusory wealth; it exists on paper.  Since the slowdown in the world economy from the 1970s, there’s been a period of stagnation in investment, so governments and business have tried to stimulate demand by blowing up speculative ‘bubbles’. As speculation has become a larger proportion of the global economy over the past three decades, we’ve been hit by a series of bursting bubbles.

Following the 2000 stock market collapse in the US, the Government and bankers lowered interest rates and tried to create another bubble – this time in real estate. The latest bubble bursting has impacted especially badly on ordinary people because the speculation was on people’s homes. Since 2000 in the US, there has been the slowest growth in the ‘real’, or productive, economy since the 1940s and the greatest expansion of the financial, or paper economy, in US history.

Trading on debt

Credit has been used as another key tool to try to stimulate the economy, leading to phenomenal levels of debt. US Government debt is now 53 per cent of GDP;  household debt is 98 per cent and business debt is 72 per cent. The financial sector debt is 112 per cent of GDP.

The subprime mortgage crisis is a consequence of providing high-interest loans on a mass scale to households on low incomes that can’t get normal mortgages. As people have been increasingly unable to service their mortgages, the value of all the financial institutions based on this debt has plummeted.

The heightened risk of depending on the housing bubble to generate profits was that investors were actually trading on debt. They took mortgage loans and “securitised” them, turning them into special investment vehicles that they could trade on.

A shadow banking system of complex forms of insurance and speculation grew up to support the inflating bubble, including ‘hedge funds’. The investment vehicles that held these new mortgage-backed securities were collateral debt obligations. The unregulated market for ‘credit-default swaps’, which are a form of insuring against credit default for bondholders, swelled to an unbelievable $62 trillion before the bubble burst – about four times the annual US GDP.

Last July, Bear Stearns found that it couldn’t put a value on a number of hedge funds that were ‘contaminated’ with collateralised debt obligations that included subprime mortgages in them. One of these hedge funds lost 90 per cent of its value; another lost its entire value.

This marked the beginning of the current crisis as the financial world began to realise that the enormous values they had placed on these financial instruments were meaningless, just paper wealth. This realisation fuelled the panic that has prompted the string of collapses and bailouts.

Deregulation

So how were these banks and firms able to make such a colossal mess of international financial markets and of people’s livelihoods and homes?  Mainly because as finance has grown as a proportion of the economy, it has been increasingly deregulated by governments as a way to facilitate the expansion of speculative opportunities.

The deregulation of the global finance market was spearheaded in the 1980s by Ronald Reagan and Margaret Thatcher. Each act of deregulation opened up new opportunities to gamble on the future movement of any financial market and borrow on the basis of predicted rises in asset values.

A key change brought about by deregulation was in the role of big banks and firms, which went from just being intermediaries to having the power to invest of their own accord. In 1933 after the Depression, the Glass-Steagall Act was passed in the US to prevent banks from making unregulated investments and basically gambling away the savings of their customers. In 1999, this act was repealed, allowing commercial and savings banks to rejoin the ranks of the investors.

After this, banks were enabled to finance risky investments provided they set up their own ‘affiliated’ investment bodies – such as hedge funds. This shadow banking system has spread rapidly since 1999. The Federal Reserve Bank said it had more than $10 trillion in assets by early 2007, making it as big as the traditional banking system.

But while the shadow system didn’t have the same restrictions on its activities as the traditional banks did, it also lacked their status,  federal protections and access to short-term borrowing during rough times – so when the mass mortgage defaults hit, the shadow banking system began to crash, infecting their associated banks and firms as well. Because there is no transparency in this shadow system of private trading, and the world of finance is so inter-connected, no-one knows where the toxic debt lies: no-one knows who owes what where. It is impossible to accurately predict chain reactions from collapses or even for the Government to accurately assess at this stage which institutions are salvageable and which are terminal.

What now?

The first priority in dealing with the crisis is stemming the contagion; the $700 billion toxic debt dumpster and bailouts are part of this strategy. But Kenneth Rogoff, the former IMF chief economist,  said: “It is hard to imagine how the US government is going to succeed in creating a firewall against further contagion without spending five to 10 times more than it has already, that is, an amount closer to $1000 to $2000 billion”.

The finance sector needs to be recapitalised, which will have to be mainly at the public expense. Already the Treasury rescues of big private financial firms and banks have socialised massive losses and now leave the public to foot the bill of irresponsible lending, manic speculation and shadowy financial dealing.

The FRB’s assets are being eroded by the crisis. In June 2007 92 per cent of the FRB’s assets were from Treasury securities. Today Treasury securities are only 54 percent of these assets, having been replaced by loans to financial institutions, some of which are unstable and whose shares have been falling.

It looks like seriously dark days ahead for the US economy, which will of course impact on the rest of the world. Economists are predicting that housing will sink further and the number of mortgage defaults will rise; that falling tax revenue will lead to cuts in social spending; and that unemployment, which has this year risen to its highest level in two decades, will continue to rise.

Credit will dry up to an extent as banks are forced to raise interest rates to replenish their cash reserves, decimated by this crash, which will have a brake effect on the global economy.

There are some militant neoliberals, in the US and Europe, who are arguing that governments should step back and let the ‘natural’ economy take its course, let the crisis play itself out, and never mind about the poverty, spiralling unemployment and home repossessions that would bring. Obviously the Government needs to act to bring the crash under control.

The real question that’s raised is what type of control:  the systemic, chronic contradictions of the economy demand more than temporary public bailouts. Re-regulation of the financial sector including the shadow bank system is vital to preventing such a disaster unfolding in the future. And even traditional economists are questioning the wisdom of allowing a return of the financial sector to private hands once it’s been nursed back to health by the Government.

Willem Buiter from the London School of Economics wrote: “Is the reality of the modern, transactions-oriented model of financial capitalism indeed that large private firms make enormous private profits when the going is good and get bailed out and taken into temporary public ownership when the going gets bad, with the taxpayer taking the risk and the losses? If so, then why not keep these activities in permanent public ownership?”

by Admin

Lisbon Treaty — dumping social Europe

Irish Ferries

Published in An Phoblacht on 5 June 2008

THE Executive Council of the Irish Congress of Trade Unions, which represents more than 600,000 workers, has voted to support the campaign for a ‘Yes’ vote on the Lisbon Treaty referendum. Leaders of ICTU, including its president, David Begg, have claimed that the treaty will be a step forward for workers’ rights as the Charter of Fundamental Rights seemingly enshrines the right to strike. Some of the individual unions affiliated to the ICTU are calling for a ‘No’ vote, including Unite, one of Congress’s largest affiliates. The Technical, Engineering and Electrical Union (TEEU) is recommending its 45,000 members vote ‘No’, and the Services, Industrial, Professional and Technical Union (SIPTU), representing more than 200,000 workers, has said it will not support the Lisbon Treaty unless the Irish Government commits to legislating for collective bargaining for workers.

No right to strike

Even a cursory glance at the text of the treaty shows the claim that it provides new protection for workers’ rights to be false.

While Article 28 states that workers may “take collective action to defend their interests, including strike action”, it immediately qualifies this “fundamental right” by explaining that “the limits for the exercise of collective action, including strike action, come under national laws and practices”.

The British Government is clearly satisfied that the treaty’s charter does not grant the right to strike. The British Trade Unionists Against the EU Constitution pamphlet, The Big EU Con Trick, quotes a British Foreign Office spokesperson as saying explicitly: “The charter doesn’t create any new rights. We spent a very long time looking at this, in particular the disputed article. It does not create the right to strike.”

Lisbon pits the “fundamental right” of workers to take collective action against the apparently even more fundamental right of capital to unrestricted movement, unbound by the national industrial laws, agreements and standards of the host countries.

Conflicting rights of employers and workers will be ruled on by a strengthened European Court of Justice (ECJ). The European Trade Union Confederation has described several recent ECJ rulings as “an open invitation to social dumping”, launching a race to the bottom for workers’ wages, conditions and rights.

Race to the bottom

Some of the recent ECJ rulings on disputes include:

The Rüffert Case

German company Objekt und Bauregie employed a Polish sub-contractor to employ Polish building workers, posted to Germany, on less than half the minimum wage agreed by German trade unions and employer associations.

On 3 April, the ECJ ruled that O&B should not be bound by the local Lower Saxony law that states public building contractors must abide by the existing collective agreements. The court found that while member states may impose minimum pay rates on foreign companies posting workers in their state, the local law restricted the “freedom to provide services” and was not justified by the aim of protecting the workers because workers in the private sector were not covered by such protections! In essence, this ruling outlaws above-minimum wages and conditions being included in public tender contracts.

The Laval Case

In 2004, Latvian firm Laval posted Latvian construction workers to Sweden and refused to acknowledge the existing collective agreement with the Swedish Building Workers’ Union.

As Sweden has a well-functioning collective bargaining and agreement system and does not have an across-the-board minimum wage bound in law, Laval claimed that it was not obliged to pay the rates collectively agreed in the building sector.

The Swedish building union took collective action. Laval claimed to the ECJ that it was being discriminated against on the grounds of nationality and that the Swedish union was infringing upon its right to provide services.

The court found that companies or “service providers” from another EU state are obliged to abide by the host agreement but collective action must be “proportional”. This means that the ECJ believes workers do have the right to take industrial action… but only when the minimum wage or conditions of the host country, or the minimum working conditions set out in the Posting of Workers Directive are being breached by the employer.

The Viking Case

In order to cut costs, the Finnish shipping company Viking Line attempted to re-flag its ships as Estonian and operate out of Estonia.

When two Finnish maritime unions organised a blockade of Viking Line, Viking took its case to the ECJ: again, the claim was that the company’s right to freedom of movement was being restricted by the industrial action of the workers. And again, in December 2007, while the court found that collective action to protect posted workers from exploitation was legal, the unions had restricted Viking Line’s right of establishment.

Lip service to workers’ rights

In all of these cases where the ECJ has taken into account the proposed Charter of Fundamental Rights, the court has paid lip service to workers’ rights and found in favour of the company.

Three things are clear from these cases and from the text of the Lisbon Treaty:

1) The right to take collective industrial action is not guaranteed as it is subject to member states’ national laws;

2) The right to take collective action to prevent the exploitation of posted workers by foreign service providers is subject to the company’s right to freedom of movement and establishment under the EU Services Directive – a right which the ECJ has repeatedly and consistently upheld as being superior to workers’ rights;

3) The collective action of workers and unions taken against foreign service providers is only deemed legitimate if it is “proportional” – that is, in defence of the most basic minimum conditions agreed on by EU bodies or set in law by the host country. What happens if workers want to take collective action in order to improve their conditions? The pattern will emerge where the minimum standards become the maximum. The higher-than-average conditions that may be included in public sector agreements are an infringement of the right to establishment.

Breaking union power

These ECJ rulings, combined with the provisions for privatisation and the removal of “distortions” from the market contained in Lisbon, are a recipe for the equalisation downwards of the working and living standards of the people of Europe while the corporations that played a key role in drafting Lisbon increase their profit-making capacity.

The recent failure of the EU to establish directives to protect agency workers and maritime workers from social dumping practices and exploitation, which Sinn Féin MEPs have campaigned for, and the EU Commission’s Green Paper, Modernising Labour Law to Meet the Challenges of the 21st Century, are further evidence of the anti-worker push from Brussels.

Among other things, Lisbon aims to create the legal basis and power to enforce the process of rendering trade unions in Europe powerless by allowing employers to avoid the collective bargaining process established in each country. The result will be the continuing and unchallenged severe exploitation of Eastern European workers and increased job displacement, de-unionisation and falling conditions in the West, with public services fought for and won through generations of struggle throughout Europe being put up for sale.

It’s in the interests of all the working people of Europe for Irish workers and trade unionists to vote ‘No’ to Lisbon on 12 June.