Credit downgrade vexes market worshippers

The decision of the rating agency, Standard and Poor’s, to downgrade the credit rating of Ireland from AA to AA- was met with hypocritical gnashing of teeth by Irish establishment figures. The National Treasury Management Agency rushed to criticise S&P, saying that their approach was “flawed”. Minster of State, Dara Calleary declared that they used a “very negative analysis”.

The decision of the rating agency, Standard and Poor’s, to downgrade the credit rating of Ireland from AA to AA- was met with hypocritical gnashing of teeth by Irish establishment figures. The National Treasury Management Agency rushed to criticise S&P, saying that their approach was “flawed”. Minster of State, Dara Calleary declared that they used a “very negative analysis”.

The irony is that one year ago, when Ireland’s credit rating was being dropped by these very same rating agencies, they were treated as the high priests of international capitalism. Their ratings were held up as objective commentary and used to justify the drastic cutbacks in public services and savage attacks on public sector workers, which have then been used in turn to pressurise private sector wages down.

These policies were sold on the basis that Ireland would be rewarded for this “harsh medicine” by the financial markets and rating agencies. Yet the opposite has turned out to be the case.

Rather than laying the basis for economic recovery, the government’s deflationary measures have resulted in a downward spiral of unemployment and reductions in consumer spending, added to by the massive debt that the state is in as a result of its large scale bailouts of banks and speculators. Unemployment increased again in August and retail sales also saw yet another monthly decline.

The gap between the interest rate Ireland pays on its debt and what Germany pays now stands at a record high. The downgrade by S&P, simply brings their rating down to the AA- level that all of the other major rating agencies already have Ireland at! No “gratitude” is being shown by these rating agencies or the speculators who make up the financial markets. Instead, they smell blood as the economic situation worsens. 

The government’s response to this downgrade will be to go further along the failed path they have already embarked on – implementing further cutbacks in an attempt to satisfy the markets. In the aftermath of the downgrade, the government reneging on its side of the “Croke Park deal” and cutting €4 billion rather than the planned €3 billion from the budget in December were both raised as possibilities. The result is predictable – a further downward spiral.

The dictatorship of these unelected, private rating agencies and the small number of super-rich speculators who constitute the financial markets must be rejected.

 

Total
0
Shares
Previous Article

Can Labour deliver real change?

Next Article

End the misery - Amnesty for asylum seekers now!

Related Posts
Read More

End the mortgage nightmare

The tragic death by suicide of former Priory Hall resident Fiachra Daly has put the exploding mortgage crisis centre stage. The brave decision by his partner Stephanie Meehan go public at this difficult time for her family has put the human face to the tragedy of this financial meltdown.

Action not “social solidarity” will defeat budget attacks

By Stephen Boyd

COMMENTING ON the aftermath of the budget, Stephen Collins political editor of The Irish Times said: “This year the silence has been eerie, mainly because the large body of PAYE workers who are being hammered by the budget have no one to directly represent their interests.”

Six hundred thousand of those PAYE workers are members of trade unions and yes, they aren’t being represented by their “leaders.” Aside from a few comments bemoaning aspects of the budget, there was an “eerie silence” from the so-called leaders of the trade union movement.

Read More

Southern Irish economy – analysis & perspectives

Caution is necessary when investigating figures for the economic situation in Ireland. There are economic vested interests at work that benefit from spinning every scrap of positive news. The media fully assist this and try to manufacture a mood or belief that substantial progress is just around the corner. So as well as trying to identify perspectives, it is necessary to take up the arguments and the propaganda that is being put forward constantly.