January 6, 2012
The march’s organiser, Diarmuid O’Flynn, says he was inspired by the Arab spring, but it’s hard to think of a place further from the heat and turmoil of the Middle East than the misty fields of County Cork. Which isn’t to say the inhabitants’ fury isn’t real.
Dubbed the “Celtic tiger” in the 1990s, Ireland is struggling under savage austerity measures. The property boom, fuelled by banks’ massive lending and foreign investment, collapsed spectacularly when the financial crises plunged the country into devastating recession in 2008. “Personal wealth has been destroyed, thousands of people are sinking into poverty, emigration has returned and unemployment is far too high,” finance minister Michael Noonan admitted in December as he announced £1.4bn in tax and charge rises in a bid to drive down the country’s debt from a shocking 10.1% of the country’s GDP to 8.6% this year. Unemployment has risen to 14.4%, with those unable to find work leaving the country in droves; next year, the Economic and Social Research Institute predicts, 40,000 people will emigrate.
But the part that has got the blood of the mild Ballyhea marchers boiling is the bond-holder bailout. In 2008, fearing a run on the banks, the country’s former finance minister Brian Lenihan agreed to give an unlimited guarantee covering most of the bonds issued by Irish banks. At the time, it seems, he was unaware how much this could cost. The IMF, on the other hand, believed the bondholders should be “burned” and made to pay for their own mistakes, but pressure from the European Central Bank ensured this guarantee was retained. Morgan Kelly, professor of economics at University College, Dublin, has said the true cost of the bank debt could amount to €100bn and warned: “Ireland is facing economic ruin.”
Since O’Flynn, a sports reporter at the Irish Examiner, realised the scale of the problem, he has been posting on his blog the ominous amounts the banks must pay out as bonds mature – this month the total will be €3bn. “Where is the money going to come from?” he asks. “Our banks are bust. So it’s going to come from us.”