The people of Ireland will be on the streets in their tens of thousands on February 9. They will be marching in a series of coordinated demonstrations scheduled in six cities across the country, including the capital Dublin.
While the protests have been organised by the Irish trade union movement, they are designed to ensure the widest possible participation across civil society. The aim is simple: to expose the big lie at the heart of the Irish bailout and to demand that European solidarity – if the term is to have any meaning – should apply beyond the limited confines of the Eurozone financial sector.
Contrary to the official line from Strasbourg and Frankfurt, there is very little evidence of solidarity with Ireland at this time. Rather, we have been saddled with a punitive debt burden that effectively eliminates any possibility of economic recovery in the near to medium term and guarantees years of continued stagnation. It is as if Ireland had fought and lost an economic war and is now burdened with penal reparations.
The bank bailout costs stand at €64 billion and many economists expect that figure to rise. To be clear, these costs, and the Irish bank debt, do not emanate from state overspending, but represent the cost of saving the Irish banking system. They were incurred by private institutions operating in a discredited Eurozone framework, which incentivised reckless lending and rewarded financial malpractice. And the EU expects the people of Ireland to pick up the tab, in full.
This is the big lie, the inconvenient truth glossed over by EU officials and ECB board members too busy patronising Ireland to notice the huge flaw in their plan. A country with a workforce of 1.8 million simply cannot repay debt of this magnitude without doing enormous social and economic damage.
While the Irish bank guarantee of September 2008 lies at the root of this current evil, the ECB’s original injunction – courtesy of Mr Trichet – was that no Eurozone bank should fail. This ensured that the original act of political madness could never be undone. In fact, it gave official EU sanction, and the imprimatur of the ECB, to the worst decision in Irish political history. It was deemed that no bondholder could be left behind. And sent the bill to the Irish taxpayer.
Over the next three years, the interest bill on just a portion of that debt will cost Ireland over €4 billion. That money will be borrowed and further interest added. Our most recent budget – formulated under the watchful eye of the Troika – involved a very painful ‘adjustment’ of €3.5 billion. The numbers simply do not add up.
In the meantime, we have haemorrhaged almost 360,000 jobs and seen families broken up as sons and daughters are forced to seek work and opportunities overseas. Of itself, that would be cause enough for the Irish trade union movement to marshal numbers and take to the streets. But there is a further, more perverse twist to this particular tale and it comes courtesy of Eurostat, the EU Commission’s own data collection and analysis agency.
In 2012, Eurostat published its own analysis of the cost of the Eurozone banking crisis, in each EU country. Surprise, surprise – Ireland tops the table. Thus far, we have paid out some €41 billion – more than Germany (€40 billion), the UK, the Netherlands, Portugal or Spain.
A trade union-funded think tank – the Nevin Economic Research Institute (NERI) – delved further into the figures and confirmed that:
The debt burden arising from the bank bailouts and its direct impact on (Irish) Government deficits is the highest absolute amount for any EU Member State over the period 2007- 2011.
It represents 42.6% of the total net cost across all 27 EU Member States.
When the cost of bailing out financial institutions is expressed as a percentage of annual GDP (2011) the cost is a staggering 25.8% for Ireland.
Ireland – with less than one percent of the EU’s population – has paid a staggering 42% of the total EU bank debt bill, at a cost of a quarter of our annual GDP.
By contrast, Germany’s €40 billion bill represents just 1.5% of GDP. Were it to be a bill of Irish proportions, their citizens would have paid closer to €700 billion for the banking crisis.
The Eurostat report contained one more nugget, as mined by Michael Taft, another trade union economist from UNITE, who revealed that the per capita cost of the bank crisis for the average EU citizen is €191.
In Ireland the cost per head is just under €9000. That’s almost 50 times what everyone else has paid.
And we are expected to pay more, the full €64 billion bank bailout bill and counting.
That’s why we’ll be marching in Ireland on February 9.