Irish Debt and Banking Crisis Creates Political Time Bomb in Ireland
At first the Irish government, headed by Brian Cowen, the Taoiseach, denied the reports that Dublin was talking to the European Central Bank about a bailout. But with the ECB, EU and IMF shuttling into Dublin by the planeload for meetings with key Irish economic and financial policymakers, Cowen and his ruling party have been forced to admit what the whole world already knew; Ireland is in advanced negotiations with the ECB and IMF for a vast financial bailout, measured in the tens of billions of euros.
In a fierce editorial, the Irish Times asked rhetorically; is this what Irish patriots sacrificed their lives for in the Easter Rebellion of 1916? As the editorial points out, Ireland struggled for its national sovereignty, not for a corrupt and incompetent clique of politicians to bankrupt the nation, forcing it to beg for a handout, in the process eroding what is left of its national sovereignty.
As in Iceland and Greece, the financial and economic crisis in Ireland, in her case driven by the reckless speculation of the Anglo-Irish Bank that necessitated a massive taxpayer bailout (according to the same politicians who allowed the speculation in the first place) is about to morph into a political crisis. Until recently, some commentators have expressed amazement at the restraint of the Irish people, as their taxes exploded along with the unemployment rate, while social spending plummeted in order to finance the massive bailout costs involved in rescuing Anglo-Irish Bank. However, with the combination of a looming bailout with strings attached, coming after the outright deception of the Irish government, public anger may be about to explode. The revised Anglo-Irish bailout costs will push Ireland’s deficit to an incredulous 35 percent of GDP. This is not only unsustainable; it will break the back of what is left of social restraint in Ireland. The bailout package being put together by the ECB and IMF is unlikely to prevent the public outrage that will gather momentum, as hinted at in the Irish Times editorial.
