Perhaps the Celtic Tiger will now turn wise
The answer by which in mid-December the European Central Bank President, Mario Draghi, froze demands to comment - at the Irish Parliament - a letter that his predecessor Jean Claude Trichet sent, on November 19th 2010, to the then Finance Minister Brian Lenihan - encouraging the request for an European bailout occurred at the end of the same month, and from which the country came out only three years later - is not popular in Ireland, while stating impeccably: it is not expected that the ECB responds to member states’ elected assemblies, because it responds already, under the provided rules, to the European Parliament.
- Thursday, 26 February 2015
The European debate about Athens - reminiscent of a recent period for Ireland - is dividing even the government: on 11th February the Minister for Finance, Michael Noonan, has distanced himself from the Minister for Agriculture, Simon Coveney, who had suggested a rapprochement to the positions of Greece. Greek current affairs does not leave indifferent Irish politics and leftist groups including People Before Profit’s movement and the nationalist leftist Sinn Féin: in a debate held on February 18th on the fiftieth anniversary of the death of Malcolm X, the Socialist Party has pulled together the social opposition, hoping for a united front. Another leftist meeting has been set in Dublin for next March 7th , 2015, by student organizations, Richard Boyd Barrett will intervene there, representing the "People Before Profit": at the heart of the debate there will be the link between social forces as "Syriza" and "Podemos" (that emerged in countries, like Greece and Spain, in which austerity is well known) and the Irish situation.
An explicit remark that can often be heard in Dublin is that in the banking and in the financial sector, in place of the bonus on the rise again, awards more linked to long-term economic trends would dissuade from “play too much” social segments that have been protected by robust pads, such as banks’ public bailout launched on 30th September 2008 and the establishment, on December 21st , 2009, of the "Nama" ("National Asset Management Agency") that for need to make money and repay the bailout has sold, at prices below their real value, facilities and private debts that it had agreed to cover and that buyers have resold immediately obtaining remarkable gains. It is clear, during these days, an escalation of hostility by sectors of the population towards government’s choices on utilities: Saturday, February 21st, in Dublin ten thousand people marched to Mountjoy prison, expressing sympathy for protesters sentenced to 28 days in jail, while the previous day had been rumored, then not confirmed at the beginning of this week, that Derek Byrne and Paul Moore - arrested on charges of obstructing the installation of water meters - had decided to begin a hunger strike. Everyone remembers 2005 and the protest in the west of the republic (then against Shell project) a movement that acquired great strength also because of the arrests and by effect of the staunchness showed by the detainees while they were defending a matter of principle.
If Fine Gael and the Labour Party are branded by their opponents as neo-liberal, the consensus does not even go to the old Fianna Fáil, social Center-Right that was a majority for decades, before the crisis: people do not forget that, just five days after the state guarantee for banks, huge budget shortfalls in Anglo Irish, in Irish Nationwide and in other banks were largely underestimated by the Department of Finance. At the so-called 'Celtic Tiger' time, exceptional conditions allowed Fianna Fáil to introduce favorable fiscal conditions for investors while maintaining safeguards for the most deprived, those most exposed, however, to the frailty of this equilibrium.
A debatable point of the Irish economy - more than of the low taxation of which several multinationals benefit - it is the chapter of business incentives, five to six billion a year of which medium-sized enterprises Irish fail to take advantage, because of their small size, so some criticize the governmental institute for growth, "Enterprise Ireland", for directing taxpayers’s resources more towards the external market than in the internal one, also accusing EU and IMF to have encouraged overflowing privatization.
Looking to the Irish economic landscape, the most significant weakness - persistent while the growth rate is aiming at full employment in 2018 - lies in a mistaken belief inherited unchanged despite recent lessons: that favorable winds now blowing from US, UK and Eurozone can be taken for granted in the long, a tricky tendency, for a country that has bet everything on external circumstances, with tax breaks, public support for foreign investment and with the winning Irish card, exports. Ireland in the long term is also exposed to fluctuations in the availability and price of energy, being dependent on foreign countries for ninety percent of its supply.
On 24th January, government sources have estimated at nearly twelve billion euro the value of Irish sovereign bonds that should be purchased by the ECB as part of its quantitative easing, nineteen billion euro have been gleaned from the "Nama" in its slow recovery of what can be saved among private crisis’ debris and in this February it is going to get another eight billion through minor operations that require more time. A figure suggests the size of the public effort in the recovery of debts, NAMA spent thirty-two billion, which only partially is recovering, thanks to a renewed “appetite of Ireland”: British and American investors appreciate again a favorable taxation, the reduced bureaucracy and the recently lowered rating of the euro, in the youngest - and in addition English-speaking - country in the Eurozone.
Becoming once again an encouraging example for the EU, however the Celtic Tiger shows contrasts that reached extreme peaks a month before Christmas, when, well before the holidays, rising incomes already pushed purchases up, but, at the same time, many neighborhoods obscured the Christmas trees just unveiled in the squares, in a sign of solidarity with Jonathan Corrie, who died because of the cold in a central street of Dublin: his sad death showed that, in the capital of the fastest growing European country, homelessness rose by twenty percent in a single year, according to estimates from a couple of weeks ago homeless people would be a thousand only in the Dublin area, and twenty thousand are on the social housing waiting list. In mid-January, the Minister of Finance, Michael Noonan, had wished that the irrecoverable costs of the bank “bubble”, linked to the real estate bubble, may be confined from forty to thirty-five billion. Since these figures are close to a fifth of Irish debt, it is understandable that debates on funds unavailable in welfare and education are quite vibrant.