So there we have it. The Republic of Ireland can now exit the bailout measures imposed on it by the Troika, and can now turn its attention to rebuilding itself after the devastation wreaked on its economy. Alas, this is not the case.
The Troika, consisting of the IMF, the ECB and the EU, might no longer be dictating the fiscal and broader economic policy of the elected government of Ireland, but this doesn’t mean that it is free from the control of the markets, who expect Ireland to close its remaining budget deficit: that means even more tax rises and spending cuts. Even when the deficit is turned into a surplus, that doesn’t make the blisteringly low levels of public spending any more comfortable. What’s more, the hidden costs of austerity will catch up on Ireland over the next few years, meaning that balancing the state’s books will be a persistent battle.
What are these hidden costs? I could not pretend to know all of the specifics, but I can reiterate the principle. Every spending cut has unintended consequences. For example, for every family that is pushed into poverty (and in an economy in which unemployment topped 15% and unemployment benefit was halved that’s a heck of a lot of families) there’s a child whose performance at school could be affected by conditions at home. That child just has to fall a grade or two at the right place, and valuable skills slip beyond their reach. A few years down the line, and the economy has lost a little more from its talent base, with implications for growth and development.
And all this in a society which is shredded. When hundreds of thousands of workers are thrown on the scrapheap, government neglects the needs of the vulnerable, and households are pushed to the brink of a financial abyss, there is a fundamental confidence and mutual trust that society lacks. Without aiming to sound melodramatic, a large section of Ireland’s population has been scarred.
And let us remember how this came about: the powers that be attempted to cannibalise Ireland’s economy into a capitalist playground of speculation and casino banking in a tax regime that aspired to match Luxembourg’s. The business community and the political establishment (including the governing Fine Gael and Labour parties) all failed to see the risk. When the banking giants and property tycoons sank, and almost took the Irish government with them, who was it that paid? The banksters and over-rewarded gamblers who caused this mess, or the pensioners, the unemployed and Ireland’s children? The same young people who are emigrating in their droves, feeling that their homeland- such a beautiful country- has nothing to give them. That is perhaps the greatest injustice of all.
A lot of people and institutions have a lot to answer for with respect to Ireland’s austerity nightmare. But I would like to leave you with the words of Enda Kenny, Ireland’s Fine Gael premier:
This is an important step but it is not an end in itself. Our lives won’t change overnight.
But it does send out a powerful signal internationally, that Ireland is fighting back, that the spirit of our people is as strong as ever.