The 99% movement in Ireland is marching on police stations in the city centre not because anything has changed in the disastrous government handling of the financial scandal (referred to locally in polite terms as the financial “rescue” package) but because Saint Patrick’s Day, March 17th., is important for Dublin’s tourism.
Tourism Minister Leo Varadkar noted that “I think if they had more concern about Dublin and tourism in the country, they [the protestors in Occupy Dame Street (ODS)] would be willing to relocate for a few days.” but “they” refused to relocate and estimates of 100 police tore up the ODS camp at 3:30AM on the night of March 8th. ODS protestors knew Patrick’s day was behind the bust: “They wanted to sweep under the carpet any vestige of resistance to what is going on in Ireland for Paddy’s Day, so the cameras would not see that there is any form of sign to say that something is terribly wrong in this country.” The department of tourism was interested in moving the movement along. The police complied. Protest, it seems, is bad for the tourism and the wearing of the green. Alternatively maybe this might have had something to do with the ODS strict no-alcohol policy.
Occupy Dame Street (the street where the Central Bank plaza is located) is Ireland’s biggest Occupy Wall Street movement. The occupiers have since spawned various public debt initiatives (audits, online campaigns, international solidarity etc…) as the stark reality of the Irish public debt scandal have become obvious to increasingly diverse sectors of the Irish population. Their police eviction is considered by many as an excuse to remove this thorn in the side of the government as ODS was permanent reminder of the compliance of the present Irish government with international financial policy as directed from the European Central Bank (ECB) in Frankfurt. Public scrutiny of this policy will not go away but ODS was rubbing the government’s face in it.
The negative consequences of a failed rescue plan put in place in 2008 by a previous Fianna Fáil led government coalition (voted out of power in 2011) were extreme by any measure. The private financial collapse was the result of a perfect financial storm with defaulting loans to Irish private property speculators further aggravating by an international credit crunch sparked by the derivatives financial collapse in the United States 2008-2009. The Irish financial sector was out of control for years after the Irish Celtic Tiger became drunk on its own success and powerful risk-oriented sectors pushed the financial envelope till it tore itself apart. Minimal government financial control and political connections of interested sectors made a disaster inevitable. There was a cozy elite managing affairs of state that consisted of construction speculation at home and abroad, local bankers providing them with credit backed by their European counterparts and swap coverage (principally from the United States) in a cocktail of corrupt politicians with their lax financial regulators.
The collapse was spectacular but the rescue was to prove worse still.
Brian Lenihan, Jnr. finance minister 2008-2011 (deceased) described his financial “rescue” as “the cheapest bailout in the world so far”. This proved to be far from the case. In fact the private debt rescue by public funds and state guarantees with bad-bank accounting in the form of a state controlled property fund called the National Asset Management System (NAMA) have pushed Irish finances dangerously close to a debt spiral and a national sovereign default. In 2010 followed a financial rescue with the IMF, and European Rescue Funds (like the ESFS backed by the ECB) most Irish private banks were taken public. State “rescues” resulted in a ballooning of Irish public debt to GDP ratios from 25% in 2007 to over 100% in 2012 by some current estimates. Minimum wages were cut and taxes rose as the government was forced into austerity measures by European and IMF agreements. Emigration, the ancient sore of the Irish society, reversed in previous decades, was opened once again. This time both Irish nationals and non-nationalized workers in Ireland took to the planes and the boats but even this could not keep up with the pace of job losses; official unemployment soared from 4% to 14% in a matter of years.
One small private elite bank was called “Anglo Irish Bank”. It was spectacularly unsuccessful. Anglo was a kind of unregulated piggy-bank for the speculative private construction sector. It was at the centre of the Irish financial collapse. The British Independent Commission on Banking Report published in September 2011, P.112 Figure 4.4: “Losses suffered by banks in the crisis as a percentage of Risk Weighted Analysis (2007-2010)”, described Anglo Irish Bank as the “worst bank in Europe”. The rescue costs for this bank alone are unknown but considered to be approximately 34,000 million euros and the bank has been wound down by the state. A lot of the problem is who should bear the cost of such bailouts. Anglo Irish bank and many other banks are effectively zombie banks, some without depositors, with huge legacy debt owed to foreign speculators. The “unsecured” speculative nature of loans to Anglo means that in a bank default, this unsecured debt is typically written off. However the Irish state has chosen to continue to pay anonymous unsecured creditors in full with public rescue funds. This curious policy has resulted in further contraction in state finances and various public demonstrations such as the “Debt Justice Action” highlighting social costs of unsecured bond repayments. The policy of paying unsecured creditors has been forced on the Irish state by the European Central Bank agreements whose provision of emergency funding to Ireland is considered by the ECB as essential to prevent damage to key financial institutions in larger European states with Irish exposure.
Legend has it that Saint Patrick was a Roman Briton, a slave captured by an Irish pirate called “Niall of the Nine Hostages.” Saint Patrick is credited with bringing the christian religion to Celtic Ireland in the fifth century some seven centuries before the first British invasion of Ireland in the year 1171 by the Norman Lord Strongbow. In the last few decades Ireland has benefited greatly from European Union and Eurozone membership but some estimates indicate that the cost of continued compliance with the ECB may wipe out all of these membership gains and more.
The reaction to the dismantling of the Irish camp was a mass march on a central police station in nearby Pearse Street. The street is named after Patrick Pearse one of the martyrs of the 1916 revolution that lead to Irish independence. This clash of two Patrick’s and the anger of the Irish people is pushing the Irish state toward confrontation with global financial markets and political and financial collapse —the jury is still out on Ireland but something tells me there might be a new stirring of Irish independence on the horizon.