“I say to the masters of my people, beware. Beware of the thing that is coming, Beware of the risen people who shall take what yea would not give.”
Padraic Pearse, Irish poet and revolutionary, executed May 16, 1916 for his part in the Easter Rebellion.
It is almost a hundred years since Pearse and his comrades were executed in the aftermath of the failed rising of 1916, but the people who run the International Monetary Fund (IMF) and the European Union (EU) might take a moment to read his poem—originally read over the grave of the great Fenian leader, Jeremiah O’Donovan Rossa—and take notice: an election is scheduled for Feb. 25, and Irish eyes are not smiling.
At stake is whether Ireland will lock itself into decades of high unemployment, burdensome taxes, and eviscerated social services in order to bail banks and real estate speculators out of trouble, or rise up and say “enough.”
The current economic crisis that turned the once formidable “Celtic Tiger” into a throw rug is the direct result of massive speculation by banks—both domestic and foreign—in Ireland’s real estate bubble. From 1994 to 2008, house prices in Dublin rose 500 percent, and speculators went on a massive construction spree that filled up the landscape with “ghost” projects: houses that were never finished or would never be lived in. Unemployment is 14 percent, and personal income has declined 20 percent. Projections are that more than 100,000 people will emigrate in the coming two years.
The banks and politicians were the major culprits in the speculation madness, with the former handing out cash they didn’t have, and the latter making sure that fees, taxes and regulations were waived. Ireland has the lowest corporate tax rate in Europe. Michael Lewis, writing for Vanity Fair, has calculated the following: the Anglo-Irish Bank lost 34 billion Euros, which if measured by its percentage of the national economy, would be the equivalent of 3.4 trillion dollars in the U.S.. Using the same formula, the losses for all Irish banks—106 billion Euros—would translate into 10 trillion dollars. Do keep in mind that Ireland is half the size of Alabama and one tenth the size of Texas.
The ruling coalition of Fianna Fail and the Green Party pushed through a $114 billion EU/IMF bailout, one that required Ireland to go back to the Iron Age, or maybe the Stone Age, when all is said and done. Taxes on the income of working people were raised to 41 percent, the minimum wage was slashed, tuition raised, and social services disemboweled. And Ireland was locked into paying back the EU at the usurious rate of 6 percent, even though the EU is borrowing the money it is lending to Ireland at 2.8 percent.
The bailout has tanked what was left of the Irish economy—the pre-bailout estimate of a 2.3 percent growth rate has been downgraded to 1 percent—and enraged the populace. One of Ireland’s current heroes is Gary Keogh, who took two rotten eggs—he prepared them by leaving them in his garage for six weeks—into a shareholders meeting of the Anglo-Irish Bank and egged the bank’s chairman.
The Feb. 25 vote will see six parties vying for votes in the 26-county elections. The current ruling party Fianna Fail, and Fine Gael, the Labor Party, the Green Party, Sinn Fein, and the brand new United Left Alliance (ULA).
A brief scorecard.
Fianna Fail (“Soldiers of Ireland”) has dominated the politics of the Irish Republic for 60 out of the last 88 years. Its economic philosophy is free market, and its social policies are conservative and closely aligned with the Catholic Church. Its traditional base is small farmers and businesses, but in recent years it has been able to draw on the enormous wealth of property speculators and financiers. If there is any one party responsible for the current meltdown, it is Fianna Fail, and it may drop from its current 71 seats in the 166-member Dial to as few as 30.
Fine Gael (“Family of the Irish”) is center-right, and the second largest party, but it hasn’t won a general election since 1982. Its economic politics are not much different than Fianna Fail’s, and the party voted—with minor reservations—for the EU-IMF bailout. Its base is large farmers, rural businesses, and Dublin professionals, and it tends to be socially liberal.
The Labor Party is center-left and an offspring of several earlier parties, including the Democratic Left, the Irish Workers Party, and the Official Sinn Fein Labor. Its base is trade unionists, civil servants and teachers, and it also voted for the bailout. Its leader, Eamon Gilmore, is demanding that bank bondholders absorb some of the pain from the bailout. If it does well, it will probably go into a coalition with Fine Gael, although there will be friction over Fine Gael’s program to privatize public services.
The Green Party has only six seats, and it is almost certain to feel the wrath voters will level at Fianna Fail, its coalition partner. It is a mostly urban party whose only real accomplishment was to ban stag hunting. It may cease to exist after Feb. 25.
Sinn Fein (“Ourselves Alone”) is a left party, and the only one to vote against the bailout. While it currently holds only five seats in the Dial, it recently took a seat away from Fianna Fail in a Donegal by-election. Its unrelenting opposition to the bailout is earning it points with trade unionists and civil servants, and the party may be on the verge of a major breakthrough, possibly even outpolling Fianna Fail.
The United Left Party (ULP) is a newcomer, formed in November 2010 from the Socialist Party, the People Before Profits Alliance, the Workers & Unemployed Action Group, plus former Labor Party members and independents. It also opposed the bailout and says it will not go into a coalition with either Fine Gael or Fianna Fail.
Sinn Fein contends that the bailout’s austerity program will destroy whatever is left of the Irish economy, an argument that recently got strong support from the British Office for National Statistics. The Office found that the United Kingdom’s economy had fallen by 0.5 percent because of a falloff in services and consumption. While the new Conservative-Liberal alliance tried to blame the bad news on the early December snowstorms, economists generally agreed that Britain’s draconian austerity budget was largely to blame.
“Now we are seeing the first signs of what the Conservative-led government’s decisions are having on the economy,” British Labor Party economic spokesman told the New York Times. Even the Confederation of British Industry chimed in. The new government has “been careless of the damage they might do to business and to job creation,” said Confederation Director Richard Lambert. “It is not enough just to slam on the brakes.”
Fianna Fail says it wants to renegotiate the 6 percent interest rate, and the Labor Party wants bondholders to take some of the pain, but so far, only Sinn Fein is demanding that the agreement be dumped. Sinn Fein President Gerry Adams says his party would reject the bailout, reverse the cuts, and submit a new budget that would ensure that those that can afford to pay will pay more. “We reject the EU/IMF deal, which is a digout for greedy bankers and speculators, not a bailout for the Irish citizens.”
Odds are the Fianna Fail will get shellacked, Fine Gael will win big, and go into a coalition with Labor. But the latter alliance will be an uncomfortable one, and there are rumors of a deal between Fine Gael and Fianna Fail. The idea would be for Fine Gael to rule as a minority government with an agreement by Fianna Fail to support it. That would allow Fianna Fail to slip into government through a side door.
The key to all this will be how well Sinn Fein and the ULA do, and whether either party gets enough votes to torpedo a Fianna Fail-Fine Gael gentleman’s agreement. What Labor will do in this case, is unclear. There is no love lost between Labor and Sinn Fein, but Labor is deeply worried that if it highlights its centrist credentials, Sinn Fein and the ULA will draw off large numbers of angry trade unionists.
One thing is clear: The Irish are angry, and they aren’t being quiet about it. “All deputies receive calls to their Dial offices from members of the public,” says Sinn Fein Dial leader Caoimhghin O Caolain. “Often they are the old, the sick and the vulnerable. Yesterday my office received one such call from an elderly man whose blind pension was cut in the budget. He had one simple message: ‘Give us a voice.’ We must all listen to him and to countless others like him.”
Any attempt to renegotiate the terms of the bailout will meet stiff resistance. Lorenzo Bini Smaghi, a member of the European Central Bank executive board, says that the EU would not allow any “reneging” on the agreement. On the other hand, the Germans seem to be edging away from the EU’s hard-nosed posture of enforcing punitive interest rates.
Whatever party does a better job of taping into Ireland’s anger will likely do well Feb. 25. But the outcome of this election is not just a concern for the Irish. Greece—another victim of EU/IMF austerity will certainly be watching what happens and whether Ireland will be the first country since Argentina declared bankruptcy in 2002 to say “Enough.” Waiting in the wings are Spain and Portugal.
Ireland is just a little island, with not many people and a lot of rain. But on occasion it engages the attention of the world. It did so in 1798. It did so during the Great Famine of 1845-48, and again on Easter Sunday, 1916. It may do so again on Feb. 25, 2011 when Pearse’s risen people will have their say.
CONN HALLINAN can be read at dispatchesfromtheedgeblog.wordpress.com