Once Ireland was regarded as an admirable tiger. Today its image has been reduced to a disgruntled PIG. Back in September 2008, Ireland became the first EU country to officially enter a recession in a public declaration and two years later there are still no signs of light at the end of the tunnel.
In fact, the situation is getting worse. Irish tax payers are now faced with a bill of 34 billion euros to bail-out the Anglo Irish Bank. For years, the bank was on an schizophrenic, spending spree, lending billions to property developers. So, when the bubble burst, the banks were left with all these unpaid loans. Anglo Irish bank is now being investigated over it’s failure to disclose personal loans of 83 million to the boss CEO and current bankrupt, Sean Fitzpatrick.
In March 2010, the OECD published a report highlighting the scale and depth of the recession in Ireland but no one predicted that one bank could bring down the whole country. But the finance Minister, Brian Lenihan has since been forced to confess that this bail-out will push the national deficit this year to 32% of GDP.
According to the Irish blogger, Paul Kinsella, the Anglo Irish bank will cost each and every Irish citizen €6200. “I never had anything to do with Anglo Irish Bank so why the hell do I have to pay €6200”, he says. According to market analyst, David Buik from BGC Partners, “how Ireland will manage to dig itself out of the manure will remain the eighth wonder of the world”.
For the moment, the Irish government has said it has enough money to last until March 2011, which means it does not have to auction bonds until at least January. But what then? The EU does have a financial rescue package but this would leave Brussels in control of spending cuts and measures that even the Irish government would dislike.
Some economists feel that the debt burden will climb even higher. Dublin has started to cut public sector jobs and force civil servants to take steep pay cuts. Next month, the Irish Government will reveal it’s much dreaded four-year plan to cut spending. Irish people can expect among other things, higher tax rates, property taxes and water charges.
The banking crisis is having an horrendous effect on Irish society. Young graduates, who have spent the last few years studying to become employable are now being force to flee the country in search of employment. Migrants from Eastern Europe who were working in Ireland during the boom have been forced back to their countries of origin. Poverty is on the rise with a recent report from the Merchants Quay charity showing a 17% increase in victims. Households are distraught as they try to struggle to make ends meet. And above all, social unrest is prevalent. Two weeks ago, 32 year-old employee of Anglo Irish bank was found hanged to a tree near his home. The bank supervisor committed suicide after suffering emotional trauma from the abuse of angry members of the public.
In 20 years time, Irish school goers will read about this grim time in their history books. And the saddest part- their parents will still be paying for the damage.
On the inside: