Debt default not ruled out

THE leadership of the Irish Congress of Trade Unions has warned that “in the face of austerity heaped on austerity”, the time may be approaching when it will advocate a default on the country’s debt to its 600,000 members.

Speaking at its biennial delegate conference in Killarney, outgoing ICTU president Jack O’Connor said while the trade union movement had not yet threatened default, “we may well come to do so and we are conscious that resources are being run down as time passes.

“However, we cannot anticipate the response of the ECB which could withdraw support from our covered banks,” he said. “Neither can we assume the way it would play with the global companies, including those in the financial services sector, upon which so many of our people depend for their livelihoods. We can be pretty certain it would mean balanced budgets overnight — which would be devastating for working people and all who depend on public services.”

His ICTU colleague, general secretary David Begg, said there were consequences to a default.

“Some we know what they would be, others we can only speculate upon,” he said. He flagged potential consequences the resultant cut off of the financial lifeline could have on public service employment and delivery, foreign direct investment and for the banking system.

“However, that is not to say that (default) would not be an option in some circumstances,” he said. “You can see the way things are evolving, austerity being heaped upon austerity, that the time might come that default might be the lesser of two evils. However, our view is that position has not arisen at this point in time.”

Mr O’Connor, who is also SIPTU president, had earlier attacked the EU/IMF/ECB troika’s influence on the country’s economic fortunes.

He said the troika’s “straightjacket” was a place “which is bad for everyone on the island of Ireland and bad for the peoples of Europe as well”.

“It reflects the interests of the major European banks, the shareholders to the detriment of the stakeholders, the citizens of Ireland and of Europe,” he said.

“We have to extricate ourselves from the straightjacket of the ‘troika’ agreement which is suffocating any prospect of growth in domestic demand and without which there will be no appreciable recovery.”

The SIPTU president also called on the Government to invest €4 billion from the country’s pension reserves in employment generating ventures that could create “upwards of 80,000 jobs”.

He said there was still €4bn-€5bn in the national pension reserve fund.

“It must be utilised to drive a job generating investment programme,” he said. “There is €78bn in pension fund assets. Today, I am calling on the Minister for Finance to engage with fund trustees to try to develop a scheme to secure 5% of their assets; that is €4bn for investment in infrastructure and venture capital in the domestic economy on the basis of exemptions from the recently introduced levy.

“This would more than offset the deflationary effect of the €3.6bn cut scheduled for budget 2012 and create upwards of 80,000 jobs, providing an enormous boost to confidence.”

Call for action

DELEGATES at the Irish Congress of Trade Unions biennial conference have backed a call for industrial action if the Government sells off state companies such as the ESB.

In an emergency motion “Saving the assets of Irish People” at the conference in Killarney, delegates were called upon to pledge ICTU to “co-ordinate a structured resistance against the sale of any vital national assets” such as ESB, Bord Gais or the national airports.

The motion said such assets were, in the main, profitable and provided good quality employment for many people.

It said the resistance proposed should typically take the form of concerted political lobbying, consideration of selective action in threatened entities and mobilising community support for subsequent demonstrations.

Brendan Ogle of the ESB group of unions said: “The current economic crisis should not be used as an excuse or reason to destroy the assets that have seen this country develop and grow, providing employment on project development for over 80 years.”

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