PRESSURE is being piled onto the Irish government to accept a further EU bail-out of between 60bn to 80bn euros, which will mean handing over control of the Irish economy and its finances to the European Central Bank (ECB), which would become the master of Ireland.
This would leave a further massive debt around the necks of Irish workers and farmers to be paid off. The country is to be bled white.
The Irish government, formerly the representative of the Celtic Tiger, is insisting that while it is bankrupt, it is not completely bankrupt, and that it has enough cash to last till next July.
The German government and the ECB are equally insistent that Dublin must give way, and that its takeover will calm the financial markets after Ireland’s cost of borrowing reached more than 9 per cent, creating an ECB fear that a crash of the euro, and a break up of the eurozone at the hands of international capital, was imminent.
EU officials in Brussels are insisting that in order to appease international capital, reduce bond prices and protect the euro, Prime Minister Cowen must in fact go, and power must be handed over to them, while the election of a new government to front their operation is organised.
The Irish government had been banking on its four-year austerity package, due to be unveiled later this month, and a tough Budget next month, to provide the basis for saving Irish capitalism.
However, an upsurge in borrowing costs forced up bond yields last week, and had a knock-on effect in Portugal and Spain sending alarm bells ringing throughout the eurozone, and ringing the loudest of all in the European Central Bank.
With Irish banks now squeezed out of the funding markets, the government in Dublin is being forced into a corner, and Ireland, and the Irish workers and farmers are going to be sacrificed, and crucified in the bid to save the euro.
The Irish public deficit this year is set to be slightly more than 30 per cent of gross domestic product, ten times the EU limit and more than three times even the Greek deficit.
Three European Monetary Union (EMU) countries have already been evicted from the capital markets, and foreign creditors hold two trillion euros of debt securities issued by Spain, Portugal, Ireland and Greece.
Under the European Financial Stability Facility (EFSF) a core of economically weakening major states have to carry the weight of a growing group of bankrupt states. This is until the weight of debt gets too much and they, along with the euro, collapse.
Last May, the EU announced a 750bn euro safety-net with the IMF for eurozone debtors to calm the growing storm.
It is estimated that within weeks up to 80bn euros will be handed over to Ireland.
However, Portugal is in worse shape than Ireland.
Its total debt is 330 per cent of GDP. The current account deficit is 12 per cent of GDP. Portuguese banks rely on foreign wholesale funding to cover 40 per cent of assets.
In Spain the corporate debt is 137 per cent of GDP.
Unless the core EMU countries raise hundreds of billions of fresh funds to boost the collateral of the rescue fund, international financial institutions will not believe that the European Financial Stability Facility (EFSF) can get them their money back.
Meanwhile, Italy’s public debt is already at 115 per cent of GDP.
French banks alone have $476bn of exposure to Italian debt.
The ECB is the last line of defence, and it is set to break.
The only way out of this crisis for the workers of Europe is to overthrow and expropriate the bankers and bosses of Europe through socialist revolutions, and replace the bankrupt EU with the Socialist United States of Europe based on a planned socialist economy, and production for people’s needs.
