Just another working week?
Unelected power brokers call the shots on world's workers
Billions of workers went to work this week clocking in the hours,
probably thinking of the weekend, the World Cup maybe, their
families or even their wage packets. For most of us it is just
another week.
But on a global basis a lot is happening this week. An
international conference on drugs is making the news, as is the
Air France pilots strike and the war between Eritrea and
Ethiopia. However, in the margins of the international news are
three very important events this week that will shape the world
we live in and determine our economic futures in a European and
global context.
Euro controllers meet
On Tuesday the full policy-making council of the European Central
Bank (ECB) met in Frankfurt to plan the seemingly unstoppable
drive to a single European currency. These unelected officials
met to set the monetary policy of the European Union and appoint
senior management staff. The ECB is set to pursue the
conservative policies of the German Bundesbank on a wider
European level.
The ECB's governing council has a six member directorate as well
as the eleven central bank governors of the EU states joining the
single currency.
There were 55 appointments to the ECB's key management staff
group. 49 of the 55 came from the European Monetary Institute,
another unelected part of the EU's bureaucracy. The appointments
mean that other than the 26-County Central Bank governor Maurice
O'Connell there are no Irish officials in the senior management
of the European Central Bank.
The Dublin Government does have two officials in the 55 staff
appointed yesterday, but none in the top 23 executive management
positions. The positions are not given out proportionately to
each member state.
Phoblacht was told by a Department of Finance spokesperson
that the appointments were an internal matter for the ECB, and
had been agreed by the Irish Government as part of the 1992
Maastricht Treaty. It seems yet another case where we didn't
study the small print before signing up.
Wall Street waits
As An Phoblacht goes to print, Alan Greenspan, the chairperson of
the US Federal Reserve (effectively the US central bank) is set
to address the Joint Congressional Economic Committee. Greenspan
is another unelected official who has economic powers that
surpass the elected Congress and even the US President.
In December 1996 Greenspan's comments that there was an
``irrational exuberance'' in Wall Street's financial markets caused
a slump in the market. Greenspan's comments this time around
could have similar effects on US financial markets. Most of the
US multinationals sited in Ireland view their US share values as
a barometer of their economic health. Already this year Intel and
Compaq have announced cuts in output.
If Greenspan decides the US economy is overheating he can raise
interest rates; this leads to a decrease in investment. For US
firms this disinvestment usually means cutbacks in their foreign
operations first. Whatever the outcome of Greenspan's address one
thing is clear: Irish and US workers have no say in determining
Greenspan's actions.
Bundesbank rules
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It seems that the Germans do not have the same problem the Dublin
Government has when getting top level appointments in the ECB
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The third decision-taking event of the week is the fortnightly
meeting of the Bundesbank Central Council. The power of the
Bundesbank in determining monetary and economic policy across the
EU is well documented. Already this week we have seen the
appointment of Manfred Korber, the Bundesbank's external
relations director, to the same position in the ECB. It seems
that the Germans do not have the same problem the Dublin
Government has when getting top level appointments in the ECB.
The Financial Times described the appointments of Bundesbank
personnel to the ECB as reflecting ``the Bundesbank's influence in
the ECB and to demonstrate the continuity between the two
institutions''.
It seems that the Dublin Government is not even in the running
when it comes to creating continuity between themselves and EU
structures. However, this did not distract them from starting the
distribution of 1.3 million leaflets around the 26 Counties to
prepare us for the arrival of the euro.
The leaflet introduces the eight euro coins and the seven euro
notes that will be our currency in 2002. Funny enough, it does
not tell households of the decisions that are being taken now by
the ECB.
No, instead the government have set up a Euro Changeover Board -
yes, there is such a body. Its chairperson Philip Hamell and
Finance minister Charlie McCreevy posed outside the department's
offices this week with oversized mockups of the euro coins.
It seems that our role and theirs is only to know what the euro
looks like. We don't need to burden ourselves with the minor
points of who is in charge. We just need to know that it is not
us.
Sutherland's $150 million
Where do former Dublin Government and EU officials go when they
finish their years of noble public service? Well, some, it seems,
have found their way into quite lucrative retirement schemes.
Take for example former Attorney General, EU Commissioner and
Director of the World Trade Organisation Peter Sutherland.
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Like Jack Lynch, Ray MacSharry and Garret FitzGerald, Sutherland
found that on leaving public office he was welcome on the boards
of Ireland's top companies
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Sutherland, like many other retired Leinster House politicians,
has found his way into a range of company directorships. Like
Jack Lynch, Ray MacSharry and Garret FitzGerald, Sutherland found
that on leaving public office he was welcome on the boards of
Ireland's top companies. For three years he was chairperson of
AIB, then came his appointment to the board of BP and as
chairperson and managing director of Goldman Sachs.
The BP job was worth £240,000 a year to Sutherland. He also held
directorships in Delta Airlines and the Swedish Wallenburgs
company.
Now as Goldman Sachs, one of the worlds largest private
investment banks, considers floating itself on international
stock markets Sutherland stands to earn $150 million. Not bad
considering he only started at Goldman Sachs in 1995. It's nice
to know that working in the public service can lead to so many
rewarding outcomes.
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