We said from the outset of the banking crisis that the bondholders who lent money to Anglo should be forced to take their losses.
The consequences of the government not taking that approach with Anglo alone has cost the Irish taxpayer €25 billion to date, with the possibilities of further billions to come if the government maintains its current policies.
The argument presented by those who supported the bailout at the outset, which was then the dominant consensus of the pro-capitalist economic commentators, was that if the bondholders were forced to take their losses, there would have been a hike in interest rates on government borrowing from the international money markets which would cost us all dearly. But the gap between what Ireland pays on its debt and what Germany pays has risen to record levels regardless! Even if you were to confine your outlook to the parameters of this system, can it be seriously be argued that the increased spreads we are told would have arisen in these circumstances would have come anywhere near the cost of the bailouts over the past two years?
However, socialists would make the point that the government’s requirement to borrow from the money markets arises from the under-taxing of unearned wealth in this country, as well as its opposition to creating wealth-creating state enterprise jobs.
The recently announced €8.2 billion losses at Anglo has sparked a decisive break up of the consensus that has existed among the right-wing commentators who blame the government for providing us all with wrong projections on the future scale of bank losses. We are now hearing belatedly from some of these sources the case for drawing a line under the bail outs and forcing the bond holders to swallow future losses!
So the notion that there are no alternatives should now be well and truly buried. However, working people should not have any faith in those commentators who have become latter day converts to opposing further Anglo bailouts whose main concern is the best strategy to ensure the survival of Irish capitalism so that things can go back to the way the were before the recession. The Socialist Party instead both opposes working people being forced to pay the price for this crisis but also fights for an alternative system to replace the capitalist chaos.
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