Barack Obama and the Queen to visit Ireland during its time of despair...
The financial rescue package for Ireland has been a national shame – so why are there no barricades on the streets of Dublin?
Strange times in Ireland; a British queen and an American president staging back-to-back visits this week and next. But what is everybody talking about? It's the economy, stupid.
Yes, the economy is really the only topic on the front pages, on the TV, on the lips of the subdued window-shoppers up and down Dublin's Grafton Street in turbulent May sunshine and showers.
The Queen, who is said to love facts and figures, may or may not learn on her visit that Ireland has 14% unemployment, that its economy will grow by only 0.6% this year, that house prices have fallen 12% this year and 40% since the 2007 peak, with the decline accelerating. She may or may not discover that Ireland has suffered the biggest decline in educational standards of any developed nation in the last decade or that it has the highest-paid civil servants in Europe.
Ireland's rollercoaster ride from brash Celtic tiger prosperity to bankruptcy has created an officer class of economic commentators whose status is akin to that of celebrity chefs. Unlike Jamie, Gordon and Heston, however, their recipes can be hard to swallow, induce nausea and create bitter arguments over the ingredients. Chief of this tribe is Morgan Kelly, an academic who specialises in the impact of the plague on 14th-century Europe and was virtually a lone voice in identifying Ireland's property bubble in the last decade. He has just delivered a devastating summary of Ireland's future.
"With the Irish government on track to owe a quarter of a trillion euros by 2014, a prolonged and chaotic national bankruptcy is becoming inevitable," he wrote in the Irish Times. "By the time the dust settles, Ireland's last remaining asset, its reputation as a safe place from which to conduct business, will have been destroyed. Ireland is facing economic ruin." He bewailed Ireland's "credit-fuelled Ponzi scheme" economy of the last decade and accused fellow economist Patrick Honohan, the central bank governor, of committing "the costliest mistake ever made by an Irish person". This was his "miscalculation" of the losses of six privately owned Irish banks, which led to the "suicidal" policy of taxpayers repaying the banks' €100bn-plus debts.
Kelly's recipe for recovery is to walk away from the European Union-International Monetary Fund bailout and for the government to bring its budget into balance immediately, necessitating a 30% cut in government spending.
Strong medicine, home truths and compelling argument written with passion and anger but most of the leading economists surveyed by the Irish Times broadly agreed with his arguments.
The debate rages on. You wouldn't think that an historic milestone in Anglo-Irish relations was about to be reached, with the first state visit of a British monarch to Ireland since its independence. Eoghan Harris, a former senator in the Irish parliament and one of Ireland's leading opinion formers, says the arrival of the Queen, followed by that of Barack Obama, will provide some "distraction from the misery", but not enough.
"The country is so preoccupied with the financial crisis. I don't know anyone who isn't suffering," he said. "There's no passion about the Queen's visit, but there's a benign affability. She is regarded like an eccentric aunt who should have called in a long time ago but didn't because of a family row, the origins of which have been long forgotten. There'll be a bit more passion about Obama, but not much. There'd be more interest in Angela Merkel arriving with a bailout."
Writer Colm Tóibín is preoccupied with his new play when we meet in a cafe near his Georgian townhouse. The award-winning novelist may not live in an ivory tower, but there is a sense of detachment from his country's troubles. Perhaps that's just his professional, coolly appraising eye. Maybe a feeling, too, that he has earned his success honestly.
Apart from the house in central Dublin, – an object of almost pornographic desire in the boom years – there is a holiday home down the coast and a place in Spain. He recalls that when he bought the townhouse he was initially refused a mortgage by the staid Bank of Ireland – one of the now infamous zombie banks dragging the country over the precipice – because they were afraid he might develop writer's block. Six years later when he bought his holiday retreat, "I had no problem at all getting the money – there had been a change in attitude. There are people responsible for that change of attitude. They are sitting in the European Central Bank and they should be fired."
Tóibín is a writer, not an economist, but his decision to blame others for Ireland's ills is common. Blaming the people who lent you the money rather than yourself for taking the money, even though you knew you probably couldn't afford to, is a popular refuge. "It's an old peasant thing," Tóibín winks. "You fool the bank manager to get the money to buy a holiday home. Here or in Bulgaria. And 'Maybe I'll not use it that much but I will own it for ever', that's why buying shares was never as popular as property. That idea arose in a society that never had much before. There's something slightly Russian about it. If you have a country that is so incredibly poor, what are you going to do with money? So you do have an element of shame about what's happened; this country is not as developed in its bourgeois habits as some of its European neighbours are."
Equally, the character of Ireland has stalled any violent reaction to the meltdown. It would be hard to imagine the French, for example, meekly accepting terms dictated by foreigners to pay off massive bank debts. Yet Ireland's protests so far amount to little more than a pensioner throwing an egg during a bank's shareholder meeting. "Nobody wants to get involved in a conflict with the guards [police], the country's too small," says Tóibín. "The guard would be somebody's brother-in-law. They are not armed and there's a very close relationship to them. It's the same with the banks. My relationship with my bank is very warm. I know them at my bank, I like them. Those things are very intimate here. Someone asks in James Joyce's Ulysses, 'What's a nation?' And the answer comes back, 'A nation's the same people in the same place.' There's very much a sense of that. So because the country's so small you have to be careful who you throw a stone at."
On a recent book-reading tour of Germany Tóibín couldn't resist asking people what they thought of Ireland's predicament. "They would say, 'We are not going to pay for your party.' That was the phrase they used, over and over again," he laughs. "They think Ireland is innocent and fun and we are always drinking. The thought of bailing out feckless Catholic countries is too much for them."
If Ireland is serious about making amends, Stephen Donnelly gives a glimpse of the future. He is one of 19 independent TDs – members of the Dáil – elected in February's general election. That is the same number of seats now held by Fianna Fáil, the party that has been in charge for most of this young country's history.
"I don't know why there isn't more anger about what's happened and what's going on, but this is what I've done: I've come here to fight it," says Donnelly, who quit his job as a management consultant for politics. It is a measure of the political upheaval that a 36-year-old with no party machine behind him won a Dáil seat.
"It boils down to this: for every euro being spent on job creation, €250 is going to failed investors in banks registered in Ireland. I would challenge anyone to call that fair," he adds. "I had just had enough. My country was being flushed down the toilet by incompetent leadership. And it's going to get worse."
He accuses European leaders of bullying Ireland down a path "which is disastrously, morally and politically wrong" and condemning taxpayers to carry the burden of a "total systemic failure". He wants the new coalition government to toughen up, to recognise it has a strong bargaining position and to negotiate a new deal. He thrusts a copy of the memorandum of understanding that forms part of the bailout plan into my hands. It spells out in painstaking detail the steps the Irish government must follow if it is to receive "quarterly disbursement of financial assistance from the European Financial Stabilisation Mechanism".
The memorandum was presented on the same day Donnelly and fellow TDs were celebrating mass at the gravesides of the leaders of the 1916 Easter Rising, who were executed by the British. "Imagine in one day going from their graves to having to read that," says Donnelly. "Can you imagine the reaction in your country if Cameron had signed that? If the French were told to pay €80,000 per household of private sector, mainly foreign, losses, wouldn't they burn down the Champs Elysées?"
For his part, Tóibín thinks that all economists are mad. But he can agree with Philip Lane, professor of international macroeconomics at Trinity College Dublin. The two certainly share an explanation of the public mood, this sense of confusion and despair that is not being converted into street protests. According to Lane, shame is at the root of the Irish reaction. "There was sufficiently wide participation in the property market for there to be a collective shame for what went on," he said. "A hangover follows a big party." Hungover people do not go out and riot.
Report by David Sharrock - The Observer
The financial rescue package for Ireland has been a national shame – so why are there no barricades on the streets of Dublin?
Strange times in Ireland; a British queen and an American president staging back-to-back visits this week and next. But what is everybody talking about? It's the economy, stupid.
Yes, the economy is really the only topic on the front pages, on the TV, on the lips of the subdued window-shoppers up and down Dublin's Grafton Street in turbulent May sunshine and showers.
The Queen, who is said to love facts and figures, may or may not learn on her visit that Ireland has 14% unemployment, that its economy will grow by only 0.6% this year, that house prices have fallen 12% this year and 40% since the 2007 peak, with the decline accelerating. She may or may not discover that Ireland has suffered the biggest decline in educational standards of any developed nation in the last decade or that it has the highest-paid civil servants in Europe.
Ireland's rollercoaster ride from brash Celtic tiger prosperity to bankruptcy has created an officer class of economic commentators whose status is akin to that of celebrity chefs. Unlike Jamie, Gordon and Heston, however, their recipes can be hard to swallow, induce nausea and create bitter arguments over the ingredients. Chief of this tribe is Morgan Kelly, an academic who specialises in the impact of the plague on 14th-century Europe and was virtually a lone voice in identifying Ireland's property bubble in the last decade. He has just delivered a devastating summary of Ireland's future.
"With the Irish government on track to owe a quarter of a trillion euros by 2014, a prolonged and chaotic national bankruptcy is becoming inevitable," he wrote in the Irish Times. "By the time the dust settles, Ireland's last remaining asset, its reputation as a safe place from which to conduct business, will have been destroyed. Ireland is facing economic ruin." He bewailed Ireland's "credit-fuelled Ponzi scheme" economy of the last decade and accused fellow economist Patrick Honohan, the central bank governor, of committing "the costliest mistake ever made by an Irish person". This was his "miscalculation" of the losses of six privately owned Irish banks, which led to the "suicidal" policy of taxpayers repaying the banks' €100bn-plus debts.
Kelly's recipe for recovery is to walk away from the European Union-International Monetary Fund bailout and for the government to bring its budget into balance immediately, necessitating a 30% cut in government spending.
Strong medicine, home truths and compelling argument written with passion and anger but most of the leading economists surveyed by the Irish Times broadly agreed with his arguments.
The debate rages on. You wouldn't think that an historic milestone in Anglo-Irish relations was about to be reached, with the first state visit of a British monarch to Ireland since its independence. Eoghan Harris, a former senator in the Irish parliament and one of Ireland's leading opinion formers, says the arrival of the Queen, followed by that of Barack Obama, will provide some "distraction from the misery", but not enough.
"The country is so preoccupied with the financial crisis. I don't know anyone who isn't suffering," he said. "There's no passion about the Queen's visit, but there's a benign affability. She is regarded like an eccentric aunt who should have called in a long time ago but didn't because of a family row, the origins of which have been long forgotten. There'll be a bit more passion about Obama, but not much. There'd be more interest in Angela Merkel arriving with a bailout."
Writer Colm Tóibín is preoccupied with his new play when we meet in a cafe near his Georgian townhouse. The award-winning novelist may not live in an ivory tower, but there is a sense of detachment from his country's troubles. Perhaps that's just his professional, coolly appraising eye. Maybe a feeling, too, that he has earned his success honestly.
Apart from the house in central Dublin, – an object of almost pornographic desire in the boom years – there is a holiday home down the coast and a place in Spain. He recalls that when he bought the townhouse he was initially refused a mortgage by the staid Bank of Ireland – one of the now infamous zombie banks dragging the country over the precipice – because they were afraid he might develop writer's block. Six years later when he bought his holiday retreat, "I had no problem at all getting the money – there had been a change in attitude. There are people responsible for that change of attitude. They are sitting in the European Central Bank and they should be fired."
Tóibín is a writer, not an economist, but his decision to blame others for Ireland's ills is common. Blaming the people who lent you the money rather than yourself for taking the money, even though you knew you probably couldn't afford to, is a popular refuge. "It's an old peasant thing," Tóibín winks. "You fool the bank manager to get the money to buy a holiday home. Here or in Bulgaria. And 'Maybe I'll not use it that much but I will own it for ever', that's why buying shares was never as popular as property. That idea arose in a society that never had much before. There's something slightly Russian about it. If you have a country that is so incredibly poor, what are you going to do with money? So you do have an element of shame about what's happened; this country is not as developed in its bourgeois habits as some of its European neighbours are."
Equally, the character of Ireland has stalled any violent reaction to the meltdown. It would be hard to imagine the French, for example, meekly accepting terms dictated by foreigners to pay off massive bank debts. Yet Ireland's protests so far amount to little more than a pensioner throwing an egg during a bank's shareholder meeting. "Nobody wants to get involved in a conflict with the guards [police], the country's too small," says Tóibín. "The guard would be somebody's brother-in-law. They are not armed and there's a very close relationship to them. It's the same with the banks. My relationship with my bank is very warm. I know them at my bank, I like them. Those things are very intimate here. Someone asks in James Joyce's Ulysses, 'What's a nation?' And the answer comes back, 'A nation's the same people in the same place.' There's very much a sense of that. So because the country's so small you have to be careful who you throw a stone at."
On a recent book-reading tour of Germany Tóibín couldn't resist asking people what they thought of Ireland's predicament. "They would say, 'We are not going to pay for your party.' That was the phrase they used, over and over again," he laughs. "They think Ireland is innocent and fun and we are always drinking. The thought of bailing out feckless Catholic countries is too much for them."
If Ireland is serious about making amends, Stephen Donnelly gives a glimpse of the future. He is one of 19 independent TDs – members of the Dáil – elected in February's general election. That is the same number of seats now held by Fianna Fáil, the party that has been in charge for most of this young country's history.
"I don't know why there isn't more anger about what's happened and what's going on, but this is what I've done: I've come here to fight it," says Donnelly, who quit his job as a management consultant for politics. It is a measure of the political upheaval that a 36-year-old with no party machine behind him won a Dáil seat.
"It boils down to this: for every euro being spent on job creation, €250 is going to failed investors in banks registered in Ireland. I would challenge anyone to call that fair," he adds. "I had just had enough. My country was being flushed down the toilet by incompetent leadership. And it's going to get worse."
He accuses European leaders of bullying Ireland down a path "which is disastrously, morally and politically wrong" and condemning taxpayers to carry the burden of a "total systemic failure". He wants the new coalition government to toughen up, to recognise it has a strong bargaining position and to negotiate a new deal. He thrusts a copy of the memorandum of understanding that forms part of the bailout plan into my hands. It spells out in painstaking detail the steps the Irish government must follow if it is to receive "quarterly disbursement of financial assistance from the European Financial Stabilisation Mechanism".
The memorandum was presented on the same day Donnelly and fellow TDs were celebrating mass at the gravesides of the leaders of the 1916 Easter Rising, who were executed by the British. "Imagine in one day going from their graves to having to read that," says Donnelly. "Can you imagine the reaction in your country if Cameron had signed that? If the French were told to pay €80,000 per household of private sector, mainly foreign, losses, wouldn't they burn down the Champs Elysées?"
For his part, Tóibín thinks that all economists are mad. But he can agree with Philip Lane, professor of international macroeconomics at Trinity College Dublin. The two certainly share an explanation of the public mood, this sense of confusion and despair that is not being converted into street protests. According to Lane, shame is at the root of the Irish reaction. "There was sufficiently wide participation in the property market for there to be a collective shame for what went on," he said. "A hangover follows a big party." Hungover people do not go out and riot.
Report by David Sharrock - The Observer