A Letter from Ireland
This summer, civil disorder erupted in austerity-ridden Ireland. In early July, a gathering of 45,000 in one of Dublin’s most famous public spaces boiled over into mass disobedience, catching the authorities off guard. As violence and vandalism started to spread among the crowd assembled in Phoenix Park, the city’s largest municipal recreational area, the local police effectively ceded control of the area. The trouble continued well into the night, resulting in hospitalizations, arrests, and two deaths.
Over the next few days, Prime Minister Enda Kenny led widespread political condemnation of the incident, while the events prompted a predictable bout of national soul-searching in the media. But while the disturbances in Phoenix Park were hardly symptomatic of a well-adjusted society or thriving economy, they did not represent an explosion of civil strife from a hard-pressed populace. Rather, the trouble occurred during an open-air concert by Swedish House Mafia, fuelled by drink and drugs, with the fatalities arising from stimulant abuse.
Anti-establishment political figures may unfavorably compare the supine acquiescence of the Irish public with the more vigorous reaction of our Greek cousins, but despite our ongoing woes the population here generally continues to favor stoic endurance over street protests. Ireland’s historically problematic relationship with intoxicants may provoke explosions of anti-social behavior, but when it comes to agitating against the economic collapse that has dominated life here for the past four years, the attitude has been one of grin and bear it.
And there has been much to bear. Reports about the disastrous state of affairs in Ireland have not been exaggerated. (At this stage, it is worth clarifying that when I speak of “Ireland,” I am referring to the Republic of Ireland, the independent state that makes up three-quarters of the island’s area and more than two-thirds of its population; Northern Ireland, which is part of the United Kingdom, has had its economic woes too, but is largely cushioned by Britain’s public purse.)
The country is in the grip of a seemingly intractable depression that dominates practically every facet of life here.
The nightmare is all the worse for the hazily pleasurable dream that preceded it. For nearly two decades Ireland enjoyed massive growth, transforming it from an underperforming, recession-ridden country of the 1980s—memorably described by The Economist magazine as “poorest of the rich”—into the much-trumpeted Celtic Tiger, the prosperous poster boy for unfettered globalized capitalism that reached its apparent zenith in 2007. At that point, the once-productive Celtic Tiger had turned into a full-blown bubble, with the vast bulk of economic and fiscal activity dependent on the thinly-stretched construction sector. But there was little foreboding that the good times were coming to an end. Doubters were crassly dismissed: in July 2007, the then-prime minister Bertie Ahern wondered, with characteristic gracelessness, why such naysayers didn’t commit suicide.
Then, on the 29th September 2008, the party came to the proverbial shuddering halt. Faced with a slowing property market (and the post-Lehman global financial crisis), Ireland’s banks faced a credit squeeze that threatened to take them down. In response, the government guaranteed not only bank accounts, but also the banks’ bonds, thus committing the public purse to cover the losses of private corporate investors. It was a catastrophic error, which has to date cost the state over $80 billion. (To put that figure in context, a proportionally equivalent guarantee in the U.S. would cost around $6 trillion.)
Its fragilities exposed by this massive shock to the system, the Irish economy immediately went into freefall. With the once-dominant construction sector eviscerated, joblessness trebled in two years from less than five percent to more than 14 perecent. State revenue—previously reliant on short-sighted taxes on property sales—tumbled, triggering expenditure cutbacks, wage reductions, and tax hikes. Closed out of the international bond markets, the state was only saved from financial collapse by the 2010 bailout by the “troika” of the International Monetary Fund, the European Union and the European Central Bank, resulting in the effective surrender of fiscal sovereignty.
Four years on, things are as bleak as ever. Unemployment remains stubbornly high, and would be much greater were people not emigrating in the tens of thousands, with Australia and New Zealand the destinations of choice. The landscape is dotted with deserted housing developments, dubbed “ghost estates,” while hundreds of thousands are trapped in stiflingly high mortgages on property that has, on average, halved in value. The previously orgiastic retail sector has been devastated, with empty storefronts proliferating in even the poshest shopping areas, while those outlets that remain struggle to survive week to week.
Even as the state has shouldered the burden created by the unholy alliance of bankers and property developers —a “bad bank” was formed to acquire bad loan portfolios, exposing the country to billions in potential losses—it has been less magnanimous when it comes to its citizens. Social welfare benefits have been cut, health and education services scaled back, and grants to charities and community groups slashed. Public servants, though derided in the right-leaning media for their job security and supposedly high pay, have seen their salaries fall and their numbers shrink through voluntary redundancy schemes and recruitment embargoes. Despite assiduous targeting of high earners by the revenue authorities, the top bracket still only pay around 30 percent in tax. (Minimum earners pay 20 percent.)
The policy of austerity continues unabated, despite the evidence that it has created a vicious deflationary circle sucking the life out of the domestic economy.
Few are untouched by our current calamities. Tales abound of previously comfortable families seeking charitable support as incomes disappear and debts spiral. In the face of an uncertain future, those still in jobs earn less, spend less and stay in more. The poorest have, of course, been hardest hit—the minimum wage was reduced last year, with little apparent effect on employment—but even the middle classes have felt the pinch, stung by evaporating business and negative equity.
On a purely selfish level, I have gone from working as a comfortably-salaried staff writer on a Sunday paper two years ago to now carving out a living as a freelance journalist in an environment wracked by newspaper closures and falling advertising. (Admittedly my own redundancy, from the Murdoch-owned Sunday Times, had as much to do with the fiscal necessities of News Corporation as the Irish media squeeze, but it seemed symptomatic of the wider malaise. And that I am happier despite earning less probably says much about my old job.) Our household income has been further hit by public service pay cuts: my partner works in the hard-pressed third-level education sector. Cushioned by savings, redundancy payouts, and the ultimate security of a supportive wider family, ourselves and our children are luckier than most.
Across the country, anger remains the default emotion. Quiz anyone about the situation here—at home, in pubs and cafes, or on any phone-in radio show—and you will hear howls of fury at the misfortune and injustice of the country’s predicament. But beneath the vocal expressions of rage, the mood is one of despairing resignation.
There is an awareness of our powerlessness as a near bankrupt small nation dependent on the goodwill of the major Eurozone countries, particularly a resentful Germany (though we have thus far escaped the toxic levels of Teutonic opprobrium aimed at Greece). The Irish may not be the ardent Europhiles they once were, but despite growing skepticism about the E.U., people displayed a firm grasp of realpolitik—or a pliant docility, depending on your point of view—by comfortably passing the recent referendum on the continent-wide fiscal treaty aimed at stabilizing the currency crisis. (True, the treaty has not yet been passed by all our European neighbors and its measures already seem ineffective. But the core point remains. Doesn’t it?)
Such plebiscites aside, the electorate has vented its displeasure on those politicians who presided over the collapse. Fianna Fáil, the main governing party from 1997 to 2011, was emphatically ejected from office in last year’s general election: under the guidance of Ahern’s hapless successor, Brian Cowen, the party lost nearly three quarters of its seats, thus ending 80 years as the country’s dominant political force. In its place came a coalition of Enda Kenny’s centre-right Fine Gael party and the minority centre-left Labour Party. But while the tone of government initially changed for the better, its substance has remained much the same. Despite much rhetoric on the election stump about “burning the bondholders” of our broke banks, once in office, the new government meekly handed over its multi-billion tranches of payments as scheduled. Meanwhile, austerity is still the order of the day, implementing cuts in the hope that our international donors and European partners will pat us on the head and cut us some slack, something that has been largely lacking. Suffice to say, faith in politicians is at a premium.
There have been dissenting voices to this supplication. The election also saw a huge surge in support for independent left-wing figures, protest candidates of various local hues, and Sinn Féin, the onetime political wing of the Irish Republican Army (IRA). But while all have been strong on populist rhetoric, with Sinn Fein particularly keen to take opportunistically oppositional stances, such groupings have been hamstrung by the strength of government parties in the Dail, as the Irish parliament is called.
Recently, however, the angry mood has been finally translated into meaningful acts of protest. This year saw the introduction of a flat rate property tax of 100 per household, regardless of the domicile’s value. It was a cack-handed, inequitable, and regressive move, one that obscured the need for the properly calculated (and much higher) property taxes vital for local government. But by requiring homeowners to register online in order to pay the tax, the government opened itself to the first widespread revolt against austerity. Despite bullying ministers threatening court action against refuseniks, anti-charge demonstrations took place across the country, while more than a third of households did not register. (I did pay the charge, if only because the move seemed a first step towards progressive property taxes, but I sympathize with those who see it as a legitimate and effective protest.) The endgame is yet to be played out, but it is notable that the government has started to tone down its menacing rhetoric.
Yet in the end, such gestures are as effective as spitballs against battleships. Even the government is largely impotent when it comes to the country’s destiny, towing the slash and burn line while hoping their kowtowing results in crumbs from the table. Interviewed on Irish radio recently, the Nobel-winning economist Paul Krugman was asked what our politicians could do to save the country. “Oh wow, very little,” he chirruped. Salvation, Krugman said, had to come from Frankfurt, the home of the European Central Bank, or Berlin, capital of the continent’s chief paymasters. Cold comfort indeed.
It should be added that the traditional Irish route to salvation, the Catholic Church, is no longer the force it was. The publication of several harrowing government reports into clerical abuse left respect for the institution and its hierarchy in tatters, even if many retain a strong sense of belief. In everyday life, the church’s old strictures have long evaporated: though same sex marriage has not been introduced, opinion polls continually show a majority in favor of such unions. That said, abortion remains a taboo subject for politicians to grasp, while the church still runs most schools. By and large, however, the old battles of church versus state have taken a back seat to the daily grind to survive.
So is Ireland’s future completely hopeless? Not quite. The robust export economy, particularly the software, pharmaceutical, and agri-food sectors, provides a glint of optimism, notwithstanding its minimal impact on joblessness and the prospect of another global slump.
At a purely civic level, Ireland has so far escaped the kind of far-right backlash that has enveloped much of Europe. Though one sometimes encounters coded mutterings about “foreign nationals” in pub corners or taxis, there has been mercifully little overt intolerance towards the 17 percent of our population born outside the island. At the risk of tempting fate, people know who the real culprits are without having to seek scapegoats.
And while Ireland’s historically rich literary and artistic life is not the miracle panacea peddled by the government at ludicrous “cultural summits,” the country’s arts scene is arguably more vibrant than it ever was during the Celtic Tiger. Small theater companies and visual artists’ collectives are popping up in vacant spaces across Dublin and beyond: even as state grants have been cut, the most committed creative practitioners have become adept at getting more from less. What this yields in the long run remains to be seen, but it is worth remembering that many of Ireland’s most influential cultural figures—from film directors like Jim Sheridan and Neil Jordan to renowned theater companies like Druid and bestselling authors like Colm Tóibin and Roddy Doyle—cut their teeth in recessionary decades of the 1970s and 1980s.
Finally, there is the sense that some small payback may be in the offing for those who landed the country in the mire. Sean Quinn, once Ireland’s richest man, has been locked in an epic—and horrendously complex—battle with the state over the industrial and financial assets he gambled on a failed bet on shares in Anglo-Irish Bank, the institution most responsible for our woes. Quinn’s son was recently jailed for contempt of court, the first time one of the erstwhile elite has been so dealt with. Sean Fitzpatrick, the bank’s former boss, is also facing prosecution in relation to the ongoing case. Of course, these penalties are paltry compared to the misery caused by these men’s arrogant actions, but still feed into our atavistic desire to see some sort of compensatory revenge. As the famed Irish rebel Dan Breen supposedly said: “Justice be damned, ‘twas vengeance we were after!”
And if it seems unlikely that Ireland will ever experience the affluence of the lotus-eating Celtic Tiger, the country hopefully may regain some of the virtues it lost during that time of rampant consumerism: communality, humility, decency. Until then, it’s time to face the music and dance.