The future of the Eurozone

Eurotower

Below is an abridged version of a speech I gave on behalf of Sinn Féin at a GUE/NGL conference on the ‘Future of the EU’ in Donostia/San Sebastian on 5 June 2017.

Last week the Commission released a ‘reflection paper’ on deepening the Economic and Monetary Union (EMU).

There is one positive element of this reflection paper – the Commission finally admits that the status quo, and the divergence it has led to, is unsustainable and has to change.

But the proposals to deepen the EMU entirely fail to address the problems caused by the structural flaws of the euro, which are becoming clearer and clearer and are now acknowledged by mainstream economists.

The reflection paper is not so much a new proposal from the Commission as it is the product of a political compromise between German chancellor Angela Merkel and French President Emmanuel Macron arising from their recent discussions.

Reading between the lines, we can see that the longstanding French demand for some limited financial transfers is proposed, in exchange for not taking any action against the massive and destructive German current account surplus, and for handing over yet further economic powers to the Commission.

The German surplus is the cause of existing debt crises in the Eurozone and will be the cause of future crises. If one country is constantly exporting more than it imports, other countries – in this case, the EU peripheral countries – will have to import more than they export.

This doesn’t just hurt the so-called periphery, or the South – German workers are also suffering the consequences of this strategy as their wages are kept permanently low, often at poverty level.

But while the EU’s “rules” set a limit for current account balances of plus-six per cent of GDP, no sanctions have been imposed against Berlin despite the fact Germany has exceeded this limit for 21 consecutive quarters and for 31 out of 40 quarters since the start of 2007.

The idea that every Eurozone country should adopt an export-led growth model should not only be rejected because it’s based on exploitation, but also because it’s just not economically possible.

Ireland, poster child for austerity

The Irish state is the poster child for the memorandum countries in terms of its recent economic recovery. The narrative goes that the Irish state followed all of the EU rules, swallowed the structural reforms and experienced export-led growth.

Leaving aside last year’s ludicrous 26% growth rate in GDP, based on Ireland’s facilitation of massive levels of corporate tax avoidance, there has been a certain of level of growth in employment over the past two years.

It’s important to note that these growth areas for jobs have not come from FDI or the Irish government’s tax-haven strategy.

Growth took place in the agriculture and food sectors, and in accommodation and tourism.

This growth was based on two related factors. The first was the devaluation of the euro as a result of the crisis, and the second was the relatively higher economic growth in Britain and the US, the Irish state’s two largest trading partners.

Devaluation of the euro was critical to the recovery experienced in the Irish indigenous sector.  The relative growth in the US and Britain was also influenced by the fact that these two states are not constrained by the Fiscal Compact rules – borrowing in the US and Britain did not fall below 3% since 2008.

But the specific circumstances of the Irish state also mean that this recovery cannot be transposed or replicated in other member states of the EU.

It also poses significant risks, especially the risk of a significant devaluation of sterling as a result of Brexit. The devaluation of sterling post-Brexit would likely have a devastating impact on this fragile recovery.

The Irish recovery happened in spite of, not because of the EU austerity recipe.

What Ireland is actually a poster child for is the role currency devaluation can play in recovery, when you’re trading predominantly with other currencies.

Transfers in exchange for rights?

Despite acknowledging that the status quo of the EMU is unsustainable, the Commission declares its firm support for the continuation of the European Semester and the Fiscal Compact.

Probably the three most significant aspects of the reflection paper from our point of view – all of which have been floated before – are its proposal of the creation of a European Unemployment Insurance Scheme, the proposal for an EU finance minister, and for an ‘investment protection programme’ to ensure public investment is maintained during an economic downturn.

In typical Commission fashion, the idea of a European Unemployment Insurance Scheme is dangled to gain public support – while the trade-off is the ‘harmonisation’ of labour relations and anti-worker reforms.

As for the proposed ‘investment scheme’, it is contradictory nonsense to create a scheme to protect investment during economic downturns while at the same time insisting on keeping the macroeconomic straitjacket of the Fiscal Compact firmly in place.

Limited transfers would require permanent structural reforms for Member States under the supervision of an EU finance minister.

We don’t oppose redistributive transfers to the so-called peripheral states to correct the imbalances that damage our economies, and of course we’re in favour of protecting investment levels in the crisis-hit countries.

But the point is that these measures are both utterly insufficient to address the underlying structural problems in the EMU, and they all demand trade-offs in rights, democracy and popular sovereignty.

So there will be a deepening of two major discussions in the EU in the near future – one on the EU budgetary capacity and one on improving social rights, linked to the Social Pillar but also linked to these proposals in the reflection paper, such as the unemployment insurance scheme.

We don’t oppose transfers to correct imbalances caused by the euro – but we will definitely oppose them if they are linked to conditionality. Social rights cannot be dependent on economic performance or a state’s following of the fiscal rules. Rights are rights.

The left in Europe shouldn’t fall for the trap of surrendering more ground to the Commission in exchange for these crumbs from the table.

New drive towards deregulation

 At the same time as you have these plans for deepening and completion of the EMU based on permanent austerity, and the dubious economic model of export-led growth, we also have a drive to dismantle the limited financial regulation that was enacted after the crisis.

We have a new drive too for the public to bail out the banks – we can see it both in the Commission green-lighting the Italian bailout last week using a loophole in the Banking Union legislation that you could drive a truck through, and through the EBA and ECB recently pushing the idea that public funds should be used to solve the ‘non-performing loan’ problem.

So taking all of this into account, the challenges for the left in the coming period will continue to be on the one hand defensive in order to try to halt the march of permanent austerity. We need to prevent the deepening and expansion of the EMU.

In the short term we need to campaign for effective sanctions against current account surpluses; for investment to be excluded from the fiscal rules; to try to reject the attempt to incorporate the Fiscal Compact into the Treaties at the end of this year; and for a real public investment plan to stimulate growth. We’re open to examining options for fundamental reform of the euro towards flexibility mechanisms or other possibilities. Some of the ideas outlined in Joseph Stiglitz’s book on the future of the euro are definitely worthy of consideration by the left.

But the option of an exit from the eurozone should also be viable and supported for member states that choose to do this as a result of their economic circumstances, just as states who want to remain within the eurozone should not be blackmailed or kicked out of the common currency against their will.

I’ll finish with a few comments on some recent and current election campaigns. We’ve all seen the elites across the EU celebrating the election results in the Netherlands and France, fostering a sense of triumphalism and complacency when what we should all be experiencing is alarm at the growth of the far right. But it is not inevitable that popular anger at the status quo is channelled into the far right.

We face the urgent challenge of developing, communicating and organizing around a programme that can win popular support, and the effective, bold and principled Labour campaign in Britain under the leadership of Jeremy Corbyn is something we can learn a lot from across Europe. Corbyn successfully managed to shift the debate from a narrow discussion on the terms of the British exit at the start of the campaign to one about what kind of country do people want to live in, what kind of world?

Irish workers facing exploitation in Australia

Pearse Doherty, Sinn Féin TD, visited Australia in 2012 and addressed the issue of Irish workers' rights

Pearse Doherty, Sinn Féin TD, visited Australia in 2012 and addressed the issue of Irish workers’ rights

Published in An Phoblacht in August 2012

The economic crisis in Ireland is of such magnitude that it dominates everybody’s lives.

In the 26 Counties, there are now more than 450,000 people out of work and the unemployment rate has reached 14.6%. The collapse of the building industry has left more than 100,000 construction workers jobless. Youth unemployment has trebled since 2008. The Irish Congress of Trade Unions recently stated that one in three men under the age of 25 is unable to find work.

These figures are actually masked by the soaring level of emigration from this state, with 70,000 Irish citizens now emigrating each year. Rural Ireland and the west of the country have been hardest hit. An entire generation of young people have been driven overseas in scenes reminiscent of the 1950s and 1980s. In County Leitrim, half of those between the ages of 22 and 26 have left.

Earlier this year, Fine Gael Government Minister Michael Noonan added insult to injury by claiming that emigration from Ireland was a “lifestyle choice”. Forced emigration is not a lifestyle choice. It is an indictment of the failure of this government, and the previous Fianna Fáil-led government, to implement a growth agenda that can create and retain jobs.

The fact is that the Fine Gael//Labour Party Coalition Government is happy to see emigration soar because it acts as a pressure valve for them in a situation where they have utterly failed to introduce an effective job-creation strategy.

Destination Australia 

Together with Britain and Canada, one of the main destinations for Irish citizens is Australia. The Australian economy is performing better than any other in the developed world – due in part to a resources boom but also because the Australian Government responded to the global financial crisis of 2008 with an effective stimulus programme instead of austerity.

In the past four years, tens of thousands of Irish citizens have emigrated to Australia in search of work. Most Irish workers are employed in the construction, mining, healthcare and hospitality industries. They are in Australia on two main types of visas: Working Holiday visas and Temporary Skilled Worker visas (‘457 visas’).

Working Holiday visas are granted to people aged between 18 and 30 for one year, and can be extended for a second year if the person meets certain requirements. 457 visas are granted to a skilled worker and his or her dependents for up to four years by employer sponsorship, and may be converted to permanent residency if the employer supports the visa-holder’s application.

Australian Government figures show that in the past year there was a 70% rise in the number of 457 visas granted to Irish citizens on the previous year. Between July 2011 and April this year, more than 8,000 457 visas were granted to Irish nationals, with about a quarter of these in the construction and mining sectors. Ireland is now the third-largest source of temporary skilled migrants through the 457 programme.

More than 22,000 Working Holiday visas were also granted to Irish citizens in 2011, almost double the number granted the previous year.

Migrant workers vulnerable

There is evidence that some Irish workers are being exploited in the workplace in Australia as they are dependent on their employer for their visa to be maintained, extended and possibly converted to permanent residency. Any workers beholden to their employer for their residency rights are naturally going to be vulnerable to exploitation and reluctant to speak up if their rights are being abused.

Australian trade unions have dubbed 457 workers ‘bonded labour’.

There are parallels between the way migrant workers are used in Australia with the way agency workers and posted workers have been abused in Ireland and across the EU. As we know from our own experience, the creation of a group of second-class workers can be used by unscrupulous employers to lower wages, conditions and rights across the board.

In Ireland, Sinn Féin has called for a Government-led job creation strategy and outlined our plan for a 13billion euro stimulus programme that could create 130,000 jobs over three years, based on existing sources of funds available to the Government.

We want to see a fundamental shift from an austerity agenda to a growth agenda so that young Irish citizens have a future in their own country. And the last thing we want to see is Irish workers being underpaid and exploited in a country they have been forced to emigrate to.

Examples of exploitation

Issues facing Irish workers in Australia include underpayment; the denial of entitlements such as leave and workers’ compensation; and diminished safety standards on sites where migrant workers are concentrated.

1) Underpayment

In the past, workers employed under the 457 visa programme were only entitled to be paid a minimum salary. The Australian trade union movement campaigned for guest workers to be paid at the market rate, and in 2008 the Australian Government legislated for this right. Now employers are legally bound to ensure that 457 workers receive the same pay and conditions as Australian workers or permanent residents in the same workplace.

There is mounting evidence gathered by the trade unions that employers continue to pay 457 visa workers less – in some cases dramatically less – than the going rate.

The reasons why temporary workers are vulnerable to exploitation and underpayment were investigated and documented in the 2008 Government-commissioned Deegan Review of the 457 visa system, which pointed to the high degree of power employers wield over guest workers in relation to their residency rights.

2) Sham contracting

‘Sham contracting’ occurs when a company tells a worker to obtain an Australian Business Number (ABN) and then signs them up as an ‘independent contractor’ instead of as an employee. Companies use this practice to evade their responsibilities to their employees and deny them their proper rights and entitlements.

While in reality the worker is an employee of a company, the ABN system allows the employer to avoid paying leave, overtime and redundancy payments, and workers’ compensation insurance.

This is another way of driving down pay and conditions across the board, and temporary workers are especially vulnerable to this practice, which in addition to underpaying these workers provides them with no recourse whatsoever if injured in the work place.

Trade unions have noted that there are a large number of Irish workers on both types of visa in this situation, even though 457 visa-holders are not actually legally entitled to work under the ABN system. The threat of withdrawing sponsorship forces many Irish workers into sham contracting arrangements in which they are being denied their basic entitlements.

3) Unsafe sites

Construction and mining, together with road transport, are the most dangerous industries in Australia.

In the construction industry, on average one worker a week loses their life on site. Figures have shown that restrictions on the right of unions to enter sites for safety reasons between 2004 and 2009 resulted in a corresponding rise in workplace accidents, injuries and deaths in the industry.

The fact is that union sites are safer sites.

Irish workers and other migrant workers in the construction sector are concentrated in non-union sites and have low rates of union membership. Trade unions have pointed out that this low level of union membership among migrant workers is at least partially related to the nature of the visa system and the power relationship between the employer and worker.

Benefits of union membership 

The economic crisis in Ireland is set to continue, and emigration is likely to continue to rise over the next number of years.

There are also moves in Australia to expand mass temporary migration schemes, called Enterprise Migration Agreements, using 457 visa workers, as well as moves to reduce the skill level required to gain a 457 visa under these schemes. As the temporary worker programmes expand they will attract more Irish citizens to Australia.

Sinn Féin TD Pearse Doherty, due to visit Australia in September 2012, told An Phoblacht: “Sinn Féin encourages every Irish worker in Australia, and all those planning to emigrate here, to make sure their rights at work are protected. The best way to do this is to join the union as soon as they arrive in the country.

“Trade unions can provide protection against underpayment, denial of entitlements, unsafe conditions, and threats of deportation by an employer.

“Australian trade unions are campaigning against the abuse of the migrant worker system by employers, and in favour of equal rights, conditions and protections for migrant workers. They are right to do so.

“Sinn Féin has consistently defended the rights of agency workers in Ireland and Europe and demanded equal rights for all workers in order to stop the ‘race to the bottom’ on wages and conditions. Just as we, together with the Irish trade union movement, have campaigned for legislation to combat the exploitation of agency workers in Ireland, Australian trade unionists are trying to prevent the creation of a group of second-class workers.

“The existing protections for temporary workers have only been achieved by union campaigns for equality.

“The trade union movement has made an enormous contribution to improving the lives and wellbeing of working people in Australia, and the Irish community has played a vital role in building and leading that movement.

“We urge Irish workers in Australia to join their union not only to continue this tradition but to ensure that their rights at work are protected.”

Know Your Rights: Download a pamphlet prepared for Irish workers in Australia here.

‘Working people should not pay for bankers’ crisis’

Martin Ferris TD with former Australian PM Paul Keating in Sydney in 2011

Martin Ferris TD with former Australian PM Paul Keating in Sydney in 2011

Interview with Martin Ferris TD on Australian speaking tour

Published in An Phoblacht in August 2011

Martin Ferris, Sinn Féin TD for Kerry, visited Australia in July and August 2011, speaking to hundreds of people at public meetings in Perth, Sydney and Melbourne on the economic crisis in Ireland, and the international campaign for Irish national reunification.

The Irish government responded to Ireland’s severe economic problems linked to the global financial crisis by imposing brutal anti-worker austerity in return for loans from the European Central Bank (ECB) and International Monetary Fund (IMF).

Elected to the Dáil in 2002, Ferris has been the Sinn Féin spokesperson on workers’ rights for several years.

Ferris said the economic crisis that struck the southern Irish state in 2008 has had a huge impact on working people across Ireland, “especially in terms of job losses, and in particular job losses in the construction sector”.

“For around 10-12 years, construction was the fastest growing sector in the economy and thousands of young people left education in order to take up a trade in the industry,” he said.

“The growth was based on an unsustainable speculative boom in the property sector, in league with the main banks and politicians.

“With the collapse of the industry, all of these young people have been laid off. Unemployment and emigration have soared to levels not seen since the 1980s.

“There are now more than 450,000 people looking for work in a state of about five million people. Almost 150,000 people have emigrated from Ireland since 2008.

“There is an enormous level of anger among the Irish people at the bankers and politicians who caused this crisis.”

Ferris said this anger grew as the then Fianna Fail-Green coalition government’s response to the crisis was to accept the terms of the €85 billion ECB-IMF bailout. None of these funds were to be used to support ordinary people, communities or services.

The interest rate on the loan was unaffordable and punitive. The loan was conditional on the government implementing drastic cuts to public spending that would have disastrous social consequences.

“The bailout was not aimed at addressing the state’s deficit problem but at shoring up a corrupt banking system and protecting international financial gamblers,” Ferris said.

“Sinn Féin, together with a majority of people in Ireland, believe these debts should not be paid by the people.

“Investors invest at their own risk. The bondholders should have been told they would not be paid.”

Popular anger was demonstrated dramatically at the February general election, in which the ruling Fianna Fail party lost three-quarters of its seats, dropping from 78 seats to 20. The Greens, which had ruled in a coalition with Fianna Fail, failed to hold a single seat.

Sinn Féin increased its representation from four TDs to 14, and has since won three seats in the Seanad (Senate) in elections in April. The United Left Alliance also won five seats in February.

“Voters viewed Fianna Fail as being responsible in large part for bringing about the economic crisis,” Ferris said.

“But people were also angered by the government’s response of turning the bankers’ debt into ‘sovereign debt’ and implementing a savage austerity program.”

But despite voters rejecting Fianna Fail, the new government — a Fine Gael-Labour Party coalition — has continued to implement the previous government’s budget.

“This includes cutting the minimum wage by about one euro per hour,” Ferris said.

“They have since reversed that cut, after provoking a lot of anger and resistance among people in low-paid industries such as hospitality and retail.”

Ferris said there were ongoing attacks on workers’ rights across the state.

“In July, the High Court made a ruling that a fast-food operator was not under a legal obligation to pay workers higher rates for working Sundays and public holidays, or overtime.”

The High Court ruled that laws that allow minimum pay and conditions are set under Employment Regulation Orders proposed by joint labour committees to be approved by the Labour Court were “unconstitutional”.

The court ruled such laws were an “unlawful interference in the property rights” of the fast-food operator.

“This ruling has serious implications for around 200,000 people working in low-paid industries,” Ferris said.

“It essentially paves the way for the minimum statutory rights and conditions to become the maximum in these industries.

“It shows that there is an urgent need to introduce laws to protect workers’ rights.

“In the absence of any functioning social partnership, it has become abundantly clear that the lowest paid workers and their families have been left in a very vulnerable situation by the Fine Gael-Labour government’s failure to bring forward legislation protecting their rights.”

Ferris said the job creation package unveiled by the Fine Gael-Labour government “cannot possibly address the unemployment crisis adequately”.

“The trade union movement faces a number of challenges in these circumstances,” he said.

“The trade union leadership has traditionally been aligned with the Labour Party, which is in power with Fine Gael.

“For the past two decades they have also been a part of a ‘social partnership’ agreement between the unions, employers and government.

“Many working people viewed the social partnership as beneficial, or at least not opposed to their interests, during the boom years. But the relationship is now being viewed as detrimental to their interests, rights and entitlements.”

In 2009, the social partnership process largely fell apart.

“Yet despite the decline in union membership and increase in inequality that the social partnership process has contributed to, the approach of trade union leaders appears to be to try to rehabilitate the principle and practices of social partnership.

“Many trade union activists are actively opposing this approach.

“In such a crisis for working people, political leadership is sorely needed.

“But the trade union leadership is affiliated with the Labour Party, which is implementing anti-worker policies.

“So this poses a big political challenge to the organised labour movement.”

Ferris outlined an alternative approach to the economic crisis that Sinn Fein and other progressive forces are campaigning for.

“Sinn Fein has consistently argued that the banking debt should not have become sovereign debt.

“We outlined a plan at the beginning of the crisis for the National Pensions Reserve funds to be used to stimulate the economy — including by setting up a state bank that could lend to small businesses and ensure they remained viable and that jobs were protected.

“However, no government has been willing to challenge the bondholders.

“The state debt is approaching €200 billion. It is inevitable that there is going to be a default — likely be disguised as the ‘reconstruction’ of the loans — in Ireland and in other countries in similar situations in the EU.

The Sinn Féin TD said the demands being made on working people in Ireland as part of paying the debt were “unreasonable”.

“They cannot be met, and nor should the people be forced to bear the debt of the bankers.

“This is a banking crisis, a result of greed by bankers and developers and cronyism and corruption in government.

“The Irish people are crying out for honest leadership, for profound change in the political system that has failed them so badly, for a new direction — a new republic.”

Ferris said the new republic that Sinn Fein envisages would be based on “the still-relevant vision of the leaders of the 1916 Rising — that is, to ‘cherish all of the children of the nation equally’, and to use the resources of the country to benefit all of the people, not just the self-appointed elite”.

“A new republic would need to deal with the negative impact of partition, which leaves six counties under British rule. It would need to be an agreed Ireland between all shades of opinion on the island.”

Ferris is a former Irish Republican Army volunteer and prisoner who was part of the Sinn Féin’s negotiating team in talks that lead to the 1998 Good Friday Agreement to end armed conflict in the north.

“For centuries Britain’s involvement in Ireland has been the source of conflict; partition, discord and division,” he said.

“The Irish peace process has delivered an end to conflict and that is to be welcomed.

“But the underlying cause of conflict persists — the British government’s claim of jurisdiction over a part of Ireland.

“The denial of the Irish people’s right to self-determination, freedom and independence is the core issue that must be resolved.”

Sinn Fein is organising a series of large public meetings in Ireland on the topic of a new republic. The meetings involve a broad range of people from different backgrounds — with a particular emphasis on involving “unionists” (supporters of the six counties “union” with Britain).

“The Irish diaspora has a major role to play in this campaign,” he said.

“Sinn Fein has organised a series of successful events over the past two years around the issue of a new republic in the US, Canada and Britain — and now Australia — on how supporters can help create the international environment for the success of this vision.

“There is a long history of Irish activism here in Australia — from republican activism aimed at building support for Irish unity, to Irish involvement in the struggle for workers’ rights and social justice here in Australia, particularly in the trade union movement,” Ferris said.

“We hope to continue working together with the Irish community and supporters here in Australia to organise a series of conferences on Irish unity next year.”

North’s Assembly must have control of local economy

Sinn Féin MLAs launch an anti-austerity billboard at Stormont

Sinn Féin MLAs and trade unionists launch an anti-austerity billboard at Stormont

Published in An Phoblacht on October 1, 2010

The likely impact of the British Government’s public spending cuts on the North’s economy, the need for a united campaign of resistance against these cuts, and the need for control of the economy to be devolved to the Assembly have been outlined to An Phoblacht’s Emma Clancy by Sinn Féin Economy spokesperson Mitchel McLaughlin.

THE BRITISH Conservative/Liberal Democrat Coalition Government is due to announce its austerity Budget on October 20th, following the Emergency Budget in June that made £6billion of cuts to public spending. The October Budget is expected to make unprecedented cuts to spending, with British Government departments’ budgets being slashed by up to 40%.

In the June Budget, the North’s Executive was told to cut a further £128million from spending this year, on top of the £393million savings it already had to make. This has taken half a billion pounds from the block grant to the Executive, which is about £12billion annually. It has been reported that the block grant will be cut by £1.5billion to £2billion in the looming spending review in October.

“The Tories’ agenda of cuts is rooted in the party’s traditional, conservative ideology and will actually threaten, rather than support, the economic recovery,” Mitchel McLaughlin told An Phoblacht.

Devolve powers

“Devolution adds complexity to the impact of – and resistance against – the public spending cuts in the North. Devolution gives ministers in the Six Counties responsibility for many issues but ministers have very little power to affect the economic situation.

“The Assembly and Executive basically have no power to address the recession and its effects, such as the rise in unemployment. The Executive has no power to raise revenue or reprioritise public spending. The spending profile is determined by the British Treasury.”

The Sinn Féin MLA said that the devolution of fiscal autonomy would empower the Executive to alter this situation and to address historic inequalities.

“Westminster has used what’s known as ‘The Barnett Formula’ to determine the block grant, which has proved inappropriate and inadequate. It is a population statistic-based formula rather than an approach based on meeting objective need or addressing legacy issues such as discrimination, conflict and under-investment.

“The Barnett formula is ostensibly aimed at achieving ‘parity’ with other regional economies but this has not been achieved. Real parity would mean that communities and individuals have access to the same quality of life and services as those who pay the same rates of taxation. On average, people in the North have about 80% access to services and quality of life as people in south-east England.

“All of the Executive departments are already functioning at a deficit in terms of their Programme for Government commitments. Now the British Government is going to take more from these already-overstretched budgets in the October Budget.

“The Executive took the decision to ring-fence education and health budgets this year. It is unlikely that these departments will remain immune from spending cuts and there are efficiencies that can be made but it establishes the principle that defending the delivery of vital services such as health and education is the key priority for the Executive.”

Public sector vital

McLaughlin said that decisions are made in Westminster on the basis of what is ‘best’ for London and south-east England – completely detached from the specific needs of the North’s economy.

“So long as economic sovereignty over the Six Counties is exercised by the British Government it will not be possible for the North to reach its full economic and developmental potential,” he said.

The weak private sector in the Six Counties means that the public sector accounts for more than 70% of GDP and employs one-third of the workforce. There is also a higher dependency on benefit payments here than in Britain, another key target of the ConDem coalition.

“So, disproportionately in the North, there are people and whole communities that are absolutely dependent on public services. In challenging the cuts, we need to bear in mind that we are dealing with a government that has always demonstrated a willingness to attack the public service,” McLaughlin said.

Mitchel McLaughlin

Mitchel McLaughlin

He pointed out that both economies in Ireland, North and South, are under-performing as a result of partition.

“The North’s private sector is under-developed in terms of competitiveness and productivity,” he said.

On September 22nd, the Confederation of British Industry released a report calling for the “radical” overhaul of the North’s public sector, including job cuts, a pay freeze and pensions review. It also proposes privatisation and the introduction of water charges. The report has been slammed by trade unions as an attempt by profiteers to use the economic downturn as an excuse to sell off the North’s public infrastructure.

McLaughlin said that some of the other parties in the Assembly share the Tories’ conservative ideological outlook and are happy to push for the privatisation of public services, for the introduction of water charges and other service charges, such as road tolls.

“The British Government has announced it will also be publishing a White Paper on ‘rebalancing the economy’ in the North this autumn – which will inevitably promote the Tory agenda of privatising the public sector and cutting spending,” he said.

“We agree that the weakness in the private sector should be addressed – but using measures that don’t raid the public sector. We agree that there are efficiencies and improvements that can be made to the public sector – but it’s very important to note that the line pushed by the Tories and other parties within the Executive that the public sector here is ‘over-sized and bloated’ is a myth.

“The North’s public sector is not too big. It is only ‘over-sized’ in comparison to the private sector which is under-developed and cuts to the public sector will certainly not lead to growth in the private sector, but rather to its decline.”

Invest in jobs

The Sinn Féin MLA explained that the expansion in private sector employment in the North since 2006-07 was not matched in a rise in wages or living conditions.

“The employment rise was largely driven by an increase in call centres. The North was marketed internationally as a low-wage economy and it still is,” he said.

“These newly-created jobs are forecast to halve over the next period.”

Figures from August show the number of people claiming unemployment benefits in the Six Counties rose to 57,800. The Irish Congress of Trade Unions warned in August that, if implemented, the coalition’s cuts to the public sector might result in up to 40,000 further job losses in the North across the public and private sectors.

Derry has the highest unemployment rate in the North, at 7.6% in August, closely followed by Limavady at 7.1%.

“The legacy of failed economic policy and under-investment by previous administrations is still being felt west of the Bann and needs to be urgently addressed,” McLaughlin said.

“The Coalition’s cuts are a recipe for mass unemployment but there is an alternative – it’s strategic public investment into job retention and creation.

“Our focus in the Executive should be on encouraging local manufacturers, small businesses and social economy enterprises to invest in Research and Development, invest in the growing renewable energy sector and seek export markets.”

Fighting inequality

McLaughlin said Sinn Féin is determined to ensure that fighting inequality is at the top of the Executive’s agenda as well as the key priority of the party’s ministers in the Department of Regional Development (DRD), the Education Department and the Department of Agriculture and Rural Development.

“The regional disparity that has developed and been entrenched over the past 90 years is going to take time to dismantle.

“Our ministers in the departments we run are working daily to break down inequality and to improve the well-being of everyone in the community.

“In the DRD, we have halted the process of the privatisation of our water and sewerage services and begun to reverse it, and we intend to extend public ownership and control over NI Water.

“Agriculture Minister Michelle Gildernew is promoting the rights of small farmers and developing basic services and transport for rural communities – whereas the agriculture department in the past was very much focused on big farmers.

“Our Education Minister, Caitríona Ruane, is battling powerful vested interests on the 11-Plus, which has huge ramifications for equality, having stratified our society and entrenched class inequality for many decades. It’s a difficult project but we are advancing on it and we will deliver it.

“When we talk about the equality agenda, it is not mere rhetoric or aspiration. In the North, the equality agenda is codified in law through the Good Friday Agreement. Sinn Féin is the only party that consistently and seriously addresses this.

“There are those in the senior civil service who view equality in cost terms – when actually it is about us as a society defending and advancing the rights of disadvantaged individuals and communities. So it’s a battle a day to change this approach.

“Sinn Féin ensured that the Executive’s last Comprehensive Spending Review budgetary process was subjected equality screening and the party is determined that this will be built upon in 2011 with a core equality impact assessment procedure central to the process.

“But the current situation is extremely challenging – if the Westminster Coalition Government proceeds with major cuts to public services and a big reduction to the block grant then it may tip the balance and result in a significant crisis,” he said.

“The most rigorous approach must be developed to prioritising frontline delivery of vital public services and ensuring that they suffer as little impact as is possible. This, too, will be a battle a day.”

United resistance

“As a party we are looking to build an alliance with the trade union movement and the community and voluntary sector to resist the cuts and to defend frontline services,” Mitchel said. “The public sector did not create the economic crisis – it was the private sector.

“We should not accept the inevitability of cuts. We should focus our minds on challenging them. All parties should agree a common approach in all of this.

“We need to enter into a negotiation with the British Government to resist cuts and secure proper control of the economic levers which will allow us to map a way out of the current recession and to protect the most vulnerable and those experiencing disadvantage at the same time.

“We need to plan to grow the economy and all options must be on the table. This includes the development and harmonisation of the all-island economy. The existence of two currencies, two different tax and social welfare regimes, two health services, and so on, all restrict our ability to effectively tackle the effects of the recession.

“We need to end needless duplication and develop efficient systems that benefit everyone on this island.

Tory economics are fantasy and fiction

George Osborne

George Osborne

Published in An Phoblacht on August 27, 2010 

“I can best describe our approach as like the methodical turnaround of a failing business. When a company is failing – when spending is rising, sales are falling and debt is mounting – you need someone to come in with energy, ideas and vision and take a series of logical steps.” That’s what British Tory Prime Minister David Cameron told the press in mid-August.

One of Cameron’s ‘visionary’ steps to regenerate the economy is to attack the Winter Fuel Payment for older people. Reports suggesting the Conservative/Liberal Democrat coalition intends to raise the age of entitlement from 60 to 66, and to cut it by up to £100. The National Pensioners’ Convention says almost 37,000 older people died from cold-related illness last winter across Britain and the Six Counties – 13 pensioners every hour.

The ferocity, speed and scale of the Coalition’s public spending cuts goes well beyond their pre-election promises and post-election warnings. The Coalition leaders don’t bother to make apologies for their actions. They are relying on the debt hysteria fostered by politicians, economists and the media – the mantra that says the state’s deficit must be reduced at all costs to ensure Britain can borrow with a good credit rating.

This explanation is backed up with Chancellor George Osborne’s claims the cuts will be “fair and progressive” and arguments that the cuts to the public sector will stimulate growth in the private sector. Everyone living in the 26-County state has heard this story before and knows how it ends.

So are the Tories stupid or just lying through their teeth?

All of these claims are dishonest and economically unsound.

The key factor in Britain’s tentative emergence from recession in the last quarter of 2009 was the Labour Government’s 2009 stimulus budget. The Coalition government’s cuts have already had a negative impact on ‘market confidence’ in the British economy, with the Bank of England’s August report cutting its 2011 GDP forecast to 2.8% from 3.4% in May as a direct result of the Emergency Austerity Budget in June.

Comparisons with Greece in relation to the deficit are totally inaccurate. The British state has longer to make the repayments and fewer international lenders to repay. The only people making the comparison to Greece are Tory politicians.

Most significant of all the false Tory claims is the assertion that the swingeing cuts to the public sector will stimulate growth and employment in the private sector.

An internal Treasury assessment leaked to the Guardian newspaper in June showed the Coalition is predicting between 500,000 and 600,000 job losses in the public sector and between 600,000 and 700,000 in the private sector over the next five years as a direct result of spending cuts.

Yet, despite their own estimate predicting the private sector will be hit even harder than the public sector, the Coalition claims that 2.5 million jobs will be created in the private sector over the same period. The British Trades Union Congress released a study of previous recessions and recoveries in June, labelling this claim “absurd”.

In the boom years of 2000-2008, 1.6 million jobs were created in the private sector – when public spending was aiding that growth.

The Coalition is claiming that when public spending is reduced, the private sector will automatically grow. But this is the opposite of the general dynamic between the two sectors. Cutting public sector jobs means less spending with a consequent loss of jobs in the private sector. And when such a profound crisis is still ongoing, the private sector is saving, not investing.

Rejecting this claim is especially important when it comes to the Coalition’s proposals to swiftly ‘rebalance’ the North’s economy through spending cuts.

The Coalition is surely aware that its predictions of private-sector growth are wildly optimistic and completely detached from reality. It is pedalling this claim to convince the public that they are on the road to economic recovery when in fact the road leads only to mass unemployment.

It is a concerted, conscious campaign, led by the Tories, to transfer more wealth from the poor to the rich.

Only a sustained campaign of resistance – led by progressive parties, the trade union movement, and the community and voluntary sector – can halt this attack. Its starting point must be rejecting the economic falsehoods pedalled by the Coalition Government and its media mouthpieces. There is an alternative and it’s public investment – targeted stimulus measures.

In the North, the campaign against this attack, which for a myriad of reasons will cut much deeper here, must be directed at securing a sufficient block grant for the Executive that acknowledges the economic conditions of the Six Counties and meets objective needs. It must also demand the democratic control of economic decision-making – that revenue raising and spending powers be devolved to locally-elected, directly accountable institutions.

Regardless of who’s in power in Downing Street, these powers should be devolved. The farcical situation where the Tories – who failed to win a single seat in the North in the May election, and who refuse to acknowledge the reality of the North’s economic circumstances – can impose these outrageous cuts highlights the urgency of this demand.

European debt crisis sparks new attacks on public sector

Anti-austerity protesters in Pairs

Anti-austerity protesters in Pairs

Published in An Phoblacht on May 20, 2010

THE British Tory/Liberal Democrat coalition has announced that it will immediately make £6 billion in public spending cuts this year in order to begin reducing the state’s £163bn deficit. The coalition will reveal an emergency budget on June 22nd, with further cuts to be implemented this autumn.

The announcement comes as no great surprise – it was a Tory election pledge, while the Lib Dems and Labour both campaigned against such immediate cuts, saying the move would threaten Britain’s fragile economic recovery and threaten to push it back into recession.

While the North’s Executive will not be affected by this round of cuts this year, it will be expected to “pay back its share” of these spending cuts as well as make further spending cuts next year. Sinn Féin has called for a united front of all parties to formulate a plan of action in the Executive to effectively resist major cuts to the block grant or the North’s public services.

Among the initial measures in Britain will be a freeze on recruitment to certain vacant public sector jobs and the sacking of agency and temporary workers. With unemployment in the state now at 2.5 million people, trade unions are preparing for a campaign of industrial action to halt the new government’s plans to cut jobs and pensions and further privatise public services.

Sovereign debt crisis

‘Reducing the state deficit’ has become the mantra of governments across Europe as the global financial crisis, which hit world markets in 2008, has entered its second phase – the ‘sovereign debt crisis’.

The United States, Britain and the Eurozone countries have collectively given the banks more than $14 trillion since September 2008. But the massive state intervention into markets has been aimed at nursing the banks and financial institutions back to the condition where they could carry on as they had before the collapse, rather than taking them into permanent public ownership.

Now, the political sponsors of the financial elite argue, begins the age of austerity – when the public deficit caused by the bail-out is to be reduced by cuts to public spending.

In response to several downgrades in Greece’s credit rating since December last year, European Union members and the International Monetary Fund initiated plans for a ‘financial safety net’ in March aimed at guaranteeing loans for member states under threat of defaulting.

On May 10th, the EU agreed the terms of the ‘safety net’, its biggest bail-out package since 2008, which consists of about €750 billion. There is €440 billion in guarantees from Eurozone states, €60 billion in a European debt instrument, and €250 billion from the IMF. Of course, any vulnerable state that needs to avail of this assistance will have to agree to harsh spending cuts and other conditions.

Austerity measures

The Dublin Government has been voluntarily implementing brutal ‘austerity’ cuts in public spending since 2008 to reduce the state deficit. Other states with high levels of public deficit (5-10% of GDP) – Portugal, Spain and Italy – have begun implementing similar cuts this year.

After Standard & Poor downgraded Portugal’s credit rating last week, the Portuguese Government said it would rush through spending cuts planned for next year. Spain’s rating was also downgraded last week by S&P and the government announced further spending cuts of €15 billion in 2010-11.

On May 9th, German Chancellor Angela Merkel’s centre-right coalition lost an important state election in North-Rhine Westphalia, and its majority in the upper house, after committing to making the largest national contribution to the Eurozone ‘safety net’ package.

Greece – which has a fiscal deficit of about 10% of its GDP, similar to the US’s and less than Britain’s – was forced to accept a “rescue package” of €110 billion this month after its credit rating was downgraded to junk status by the same agencies that played a major role in causing the global financial meltdown in 2008.

The package of loans and guarantees came with conditions of major public spending cuts, including cuts to public service jobs and pensions, raising the retirement age, privatisations and more – provoking outrage among the Greek population and a general strike that shut down the country on May 5th.

Economist Michael Burke pointed out in ‘An Phoblacht’ last week that the bail-out is not aimed at reviving the Greek economy. “The targeted beneficiaries of the bail-out are the holders of Greek Government debt. These are mainly German, French, British and US banks,” he wrote.

Lessons

Several things are clear from the latest crisis in Europe, which has arisen as a result of the response to the 2008 crisis.

The states with the highest debt-to-GDP ratio are those that have implemented cuts rather than stimulus measures to deal with the recession.

The Greek/Eurozone crisis, like the global financial crisis, is largely the result of shady financial speculative practices that were not reined in and regulated after the 2008 collapse.

EU leaders charge Greece with masking its true debt level since entering the Eurozone in 2001. Goldman Sachs helped the Greek Government do so by turning its public debt into tradable ‘derivatives’. Goldman Sachs and other financial institutions were then able to gamble on Greece defaulting. This speculation fuelled the “loss of market confidence” that saw the state’s credit rating downgraded to being a risk for investors.

France, Germany and Italy have also turned their public debt in tradable derivatives.

The financial crisis has not passed but has entered a new phase of public debt and the nationalised debt is being repaid by states’ cuts to public spending. Political, economic and social policy decisions have been totally subordinated to the market.

It is also clear that Eurozone leaders are trying to ensure that the weaker states in the zone are forced the bear the brunt of the most severe public spending cuts. The strongest members are embarking on a drive to reduce member states’ independence in fiscal policy matters.

If the austerity measures are successfully implemented in Greece, workers in Ireland, Portugal, Spain – and then the rest of the Eurozone states – will be next.

ITGWU Centenary : SIPTU’s Jack O’Connor interviewed

Jack O'Connor

Published in An Phoblacht on 8 December 2008

NEXT year will mark the centenary of the foundation of the Irish Transport and General Workers’ Union, the forerunner of SIPTU, Ireland’s largest trade union with more than 200,000 members. SIPTU’s general president Jack O’Connor spoke to An Phoblacht’s Emma Clancy this week about the union’s plans to celebrate 100 years of fighting for workers’ rights and the key challenges facing the trade union movement today.

JACK O’Connor explained that the foundation of the ITGWU by Jim Larkin in 1909 will be marked by SIPTU through a series of events throughout the year that, as well as marking the establishment of the union, will also commemorate key events including the Dublin Lockout and the execution of James Connolly.

“We want to celebrate a century of working for the rights and interests of working people and we invite all trade unionists, republicans and progressive-minded people to join us in doing so,” he said.

“The struggle launched by the ITGWU 100 years ago – to insist on democracy and equality in society by asserting the rights of labour – remains as important as ever. The rights and achievements won through generations of struggle by working people in Ireland are coming under a sustained and severe assault by business and government today. The best way we can commemorate the ITGWU is by defending the rights, working conditions and living standards we’ve won and ensuring we continue to move forward.”

Exacerbating crisis

O’Connor told An Phoblacht that the wealth generated during the Celtic Tiger years was squandered by Fianna Fáil-led governments instead of being strategically invested in order to achieve sustainable growth.

“With the global crash of the debt-ridden, unregulated financial market, we’re seeing the collapse of the neo-liberal model that the Irish governments and business have given slavish adherence to over the past 10 to 11 years,” he said.

“Economic expansion in Ireland as in other states was based on an increasing reliance on property-driven speculation as opposed to building a real economy and of course the folly of that approach is now painfully clear. The economy is set to contract by four per cent over the next year. We’ve never had an economic reduction of that abruptness and scale happen in this state. It is widely predicted that 10 per cent of the population will face unemployment next year.”

O’Connor said that the Irish Government is facing something of a collapse in the public finances and a deficit of €8 billion in projected income. “But the road it has chosen to go down in the Budget 2009 not only tries to shift the burden of paying for the crisis onto those least able to bear it, it is directly exacerbating the economic downturn,” he said.

SIPTU has pointed out that there has already been a reduction in the wages of workers across both the public and private sectors since 2005 in real terms, after inflation is taken into account. O’Connor explained that consumption in Ireland accounts for 48 per cent of the GDP and that the Budget 2009, by imposing a one per cent income tax levy on low and average-paid workers and raising VAT, has reduced the amount of money ordinary people can spend. He said this dampens the economy when demand needs to be stimulated and will cause the further loss of jobs.

Pay deal threatened

As part of the latest social partnership negotiations a statewide Transitional Pay Agreement was reached in September between the government, employers’ groups and most trade unions, including SIPTU. For the majority of workers covered the agreement provides for pay increases of six per cent over 21 months, with a 0.5 per cent additional increase for the low-paid. It also allows for a three-month pay pause in the private sector and an 11-month pause in the public sector.

Following the announcement of the deal, Sinn Féin slammed the government for its failure to deal with the issue of low pay, pointing out that the 0.5 per cent increase would amount to about an extra five cents per hour for low-paid workers. Unite members voted to reject the pay deal.

Describing the pay deal as “modest”, O’Connor said: “We respect that some view the agreement as unsatisfactory. Obviously we would have preferred to win higher pay increases for workers, particularly for low-paid workers, but in my opinion the terms negotiated were the best available in this specific context.”

Responding to the recent call by Fine Gael leader Enda Kenny for a suspension of the pay deal, O’Connor warned: “Given the severity of the crisis and the need for stability to regenerate the economy and given the modest nature of the pay deal, the government should be loath to touch the agreement.

“SIPTU utterly rejects the reactionary call by Fine Gael and by some within the governing coalition to renege on the Transitional Pay Agreement. First and foremost because public service workers have a right to receive a pay increase in line with inflation to maintain living standards but also because the suspension of the pay deal would exacerbate the economic recession and collapse consumption by seriously undermining workers’ ability and confidence to spend.

“The government should immediately, as a confidence-building measure, publicly affirm its commitment to fully implementing the pay deal.”

Construction

The Construction Industry Federation (CIF), one of the sectors that profited most through the social partnership during the boom, has rejected the Transitional Pay Agreement and has sought a 10 per cent pay cut across the board for building workers.

“For the CIF to reject the agreement is short-sighted in the extreme,” O’Connor said.

SIPTU and other trade unions covering workers in the construction sector have called on the government to refuse to award public contracts to builders that refuse to adhere to the pay deal.

“We will be insisting that the government honours its obligations under the agreement to ensure that only those employers who adhere to national pay policy qualify for publicly-funded contracts,” O’Connor said.

SIPTU is working with the other construction unions to develop a campaign to protect workers’ pay and conditions independently of the social partnership process.

Making the poor pay

Discussing the latest budget, O’Connor told An Phoblacht: “The government has ham-fistedly tried to rectify the gap in the public finances in the Budget 2009 through shifting the burden onto those least able to bear it – sectors it viewed as easy targets. Those who have done best through the boom years have not been asked to bear a fair share of tax.”

O’Connor said that the one per cent income tax levy essentially cancels out the 0.5 per cent additional pay increase for low-paid workers and acts as a brake on consumption.

“The government has stated its aim to cut public expenditure next year in order to balance the budget,” he said. “But we already have among the lowest level of public spending in western Europe.

“I think the tough question for the government is – can we continue to afford the luxury of having the lowest level of tax for the top tax rate in western Europe?”

O’Connor said: “The government should raise the top rate tax from its current 41 per cent back to 42 per cent and increase tax on non-residential property. In my view there is definitely a public willingness to accept that those who are better off as a result of the boom ought to pay higher tax on their wealth.

“It would have been far more acceptable to the majority of people for the government to do this than to make the attacks on vulnerable groups that it did in the budget. It wouldn’t have affected the government’s standing in the same way.”

Recovery

O’Connor outlined the strategy that SIPTU is advocating the government pursue in order to prevent further job losses and facilitate economic recovery. In addition to reversing the disastrous budget cuts on social services, and progressive taxation reform, SIPTU proposes that the government borrow strategically and expand its capital expenditure programme to ensure employment and stimulate growth.

O’Connor pointed out that the Dublin government is in a better position than most to engage in short-term borrowing with a net debt to GDP ratio of under 40 per cent, in comparison to an average Eurozone debt to GDP ratio of about 65 per cent.

“The government needs to restore confidence to the point where money is circulating in the economy in order to prevent massive job losses,” O’Connor said.

As well as public borrowing, SIPTU and the Irish Congress of Trade Unions are advocating the recapitalisation of the banks under public control, with protection for homeowners against repossession.

SIPTU has reported that following the massive government guarantee for the banks, Irish banks have now cut back drastically on lending to individuals and small and medium-sized enterprises in an attempt to improve their loan to deposit ratio.

O’Connor told An Phoblacht, “SIPTU is advocating the recapitalisation of the banking sector through a process of nationalisation and/or partial nationalisation of the Irish banks. We are opposed to recapitalisation happening through private equity funds. The €440 billion state guarantee has socialised the banking risks – and a process now of private capitalisation would result in privatised profits.”

Specifically, SIPTU is proposing that recapitalisation happen through a preference share issue by the state from the National Pension Reserve Fund.

“We want transparency and public control together with a guarantee for mortgage holders that their homes will not be repossessed,” O’Connor said. “With the possibility of 10 per cent of the workforce being unemployed next year, we believe the government must introduce a two-year moratorium on mortgage repayments for those who’ve lost their jobs and face eviction.”

Lisbon Treaty

Discussing the announcement by Taoiseach Brian Cowen last week at the EU summit that he would rerun the Lisbon Treaty referendum in the 26 counties by next October, O’Connor explained SIPTU’s position on the treaty.

“Irish workers have and will endorse ‘Social Europe’ but they will not support the savagery of the unfettered free-marketeerism and the ‘race to the bottom’ in the workplace which has become pre-eminent in recent years,” he said.

“When the Lisbon Treaty went to a referendum in June, SIPTU refused to call on its members to support it unless the Irish Government committed to domestic legislation enshrining the right to collectively bargain.

“The Charter of Fundamental Rights did not contain any significant shift or step forward for workers’ rights as some on the left claimed. Recent rulings by the European Court of Justice, combined with the fact that Ireland has no domestic legislation in place protecting the right of workers’ to collectively bargain or to protect workers from being targeted for their membership or activity in a trade union, gave working people little confidence in the government’s call for a yes vote.

“We won’t be departing from our insistence that legislation must be passed here before SIPTU would agree to support Lisbon. And we don’t believe the same proposition should be put to referendum again as it’s a rejection of the democratic will of the public who just voted in June to reject it.

Capital offensive

The SIPTU general president said, “What we are seeing internationally is global capital attempting to make working people pay for a crisis not of our making.

“In Ireland, we have these past five years been living through the most savage and sustained attack on the rights, wages and living standards of working people we’ve seen in at least 30 years.

“The attack has been two-pronged – based on the one hand on the exploitation by corporations of vulnerable migrant workers through employment agencies, which has seen a drive towards casualisation and a race to the bottom.

“The other key aspect of the attack has come from the government in the form of cutbacks on social services and an ideological campaign against public sector workers – paving the way for open attacks on the public sector.

“There is no doubt that the recession is prompting the intensification of these attacks and we can see that in the budget, in the response to the pay deal by the CIF, in the suggestion from Brian Lenihan that the public sector workers’ pay increase needs to be revisited.

“We are bound to see the intensification of the exploitation of agency workers Irish Ferries-style by the likes of the CIF and its head Tom Parlon.”

O’Connor explained that “SIPTU has been leading a progressive campaign for legislation that will combat and prevent the exploitation of these workers in and of itself and as a means to undermine established wages and conditions in this state.

“As for public sector workers – let us be clear about this. Average earnings in the public sector increased by only 1.7 per cent in the year to June 2008, while inflation was five per cent. Public servants have already taken a pay cut in real terms each year since 2005. These workers deserve to maintain a decent standard of living and have their pay keep in line with inflation.”

Organising

O’Connor described the key challenges facing the trade union movement in Ireland as being to secure legislation on a range of workers’ issues including the right to collective bargaining and industrial action, trade union recognition and further legislation to combat exploitation and social dumping.

“The social partnership has the potential to deliver a sustainable, democratic economy where workers’ rights are protected,” he said. “But this is dependent on our negotiating position which is determined by our ability to increase union membership and strength.”

O’Connor described the effort by SIPTU since 2004 to transform from a service-based union to one based on the organising model of trade unionism, which aims to overcome the steady decline in union membership that has taken place in most countries since the 1970s.

“In July we had a conference that tried to bring together the past five years of analysis and preparation to examine how to move forward with the necessary restructuring,” he said.

“The organising model is aimed at rectifying the absurd situation where more than 95 per cent of our resources are concentrated on the employers of the 35 per cent of workers who are organised in trade unions.”

He said that SIPTU has made slow but steady progress in moving towards the organising model, which aims to make joining and participating in union campaigns easier for workers who are not in unionised workplaces.

“Our strength is in our level of organisation,” he said. “We need to put in place mechanisms that can help us make this transition, increase the participation and input into the campaigns and activities of the union by as many workers as possible.”