Irish politics are in a state of paralysis — the recent general elections resulted in a hung Dáil (the lower house of the Irish parliament), and the prospects of electing a Taoiseach (Prime Minister) without new elections are looking bleak: No party is willing to concede and allow another party to form a government. This current deadlock is the political reflection of a larger shift in Irish society. As the political status quo begins to falter, the long dominant parties, Fianna Fail and Fine Gael, that emerged out of civil war in the 1920s, have to make space for the increasing influence of smaller parties and independent politicians. These shifts are representative of a larger shift in Irish society, with increasing calls to reject the status-quo austerity policies pushed by the main parties, and that rejection is now materializing in the political arena.
In September 2008, the Irish economy crashed down from its financial high, produced by the alleged success of neo-liberal economic policies. Years of strong economic growth gained the country the moniker “Celtic Tiger” as its booming economy was comparable to the strong growth of many markets in East Asia at the time. However, the Irish property bubble which was crucial in buoying the years of growth burst and the liquidity of Ireland’s major private banks started drying up at a worrying pace. The Irish banking system, embroiled in massive mortgage debts and plagued by widespread corruption, would need billions of euros to even begin to get it back on track. In the weeks following the September fiasco, the government delivered hefty bailout funds to Irish banks in the hopes of preventing total bankruptcy.
Anglo Irish Bank was perhaps hit the hardest by financial turmoil, requiring a total of €50 billion for a bailout. Shares in the bank plummeted from a peak of €17 in May 2007 to just 12 cents by December 2008. Evidence soon emerged that the bank’s chairman, Seán Fitzpatrick, had not only failed to cooperate with the government, but also had been hiding bank spending details from the government Revenue Commissioners and conducting private loans to close friends, family and top business owners, right before the financial crisis in July 2008.
The Anglo Irish Bank and its executives, Fitzpatrick in particular, soon became some of the most hated figures in Ireland. To make matters worse, in 2010, audiotapes emerged of a private conversation between Fitzpatrick and others including David Drumm, the CEO of Anglo Irish Bank. At one point in the recording, Drumm can be heard saying, in reference to the figures submitted to the government for bailout funding, that he had “pulled [the figures] out of [his] arse.” Other parts of the conversation ridiculed the Irish and European taxpayers who were funding the bailout. Needless to say, the audiotapes prompted serious backlash. Moreover, it is crucial to note that such conversations are representative of a larger phenomenon of the deplorable power held by banks, such as Anglo Irish Bank, over the government, and the pervasive lack of banking accountability that has continued until today.
In the process of bailing out the banks and trying to get the economy kickstarted, the government accrued a massive debt. Despite pumping billions of euros into the banking system, the Irish economy still stood on the verge of meltdown. With government debt skyrocketing, confidence in government bonds fell, leaving the government unable to take much more action and it was forced to accept a bailout of €85 billion from the Troika (the European Union, the European Central Bank and the IMF). Since the introduction of this scheme, along with additional help from others, many have argued that Ireland has successfully reversed its disastrous economic slide. Indeed, by December 2013 when Ireland exited its EU-IMF bailout program, GDP was on the rise and unemployment was falling. Ireland was the austerity poster child: crucial in the justification of the policies of the European banking system and the austerity policies imposed throughout Europe.
Nonetheless, many argue that austerity policies had little to do with the recovery, instead pointing to lowered corporate tax rates as the primary driver of recent growth. These lowered rates invited massive corporations, such as Google, Apple and Facebook, to open European bases in Ireland, consequently boosting the country’s economy. Regardless of the real reason behind the economic resurgence, one fact remains the same: Irish taxpayers bore the brunt of the social cuts that came with austerity.
Austerity measures in Ireland brought massive cuts to healthcare, education and community projects. In the healthcare sector alone, the national Health Services Executive made cuts of up to €2.7 billion, more than €500 per person. In education, significant cuts were made to the numbers of teachers as well as to investment in school infrastructure. Other funds providing financial support for low-income families and Traveler communities (a minority group) were also cut.
One of the many grave consequences of these austerity measures has been significant increases in inequality and poverty in Ireland, with the rate of child poverty increasing from 18 percent in 2008 to 29.1 percent in 2013. In fact, quite tellingly, on the day of the general elections in February, many families were facing eviction. Those worst impacted by austerity politics brought about by the failure of Irish bankers have so far been lower- and middle-class families and individuals, who have yet to see the benefits of the supposed Irish economic recovery.
Perhaps the most revealing policy example of the nature of these austerity measures was the proposal to privatize household water. As a condition of the Troika bailout, in March 2014, the Irish government rolled out an incremental plan to start charging households for their water usage. In a country where there is no shortage of rainy days, these water charges seemed to epitomize the lunacy of austerity plans and the disconnect between political leaders and the rest of the nation.
Alongside wholesale social cuts, rising homelessness and inequality, and increasing privatization, the Irish government has failed to hold the executives of the top Irish banks that caused the financial meltdown of 2008 in the first place accountable. Only now, 8 years on, are individuals like Drumm and Fitzpatrick of Anglo Irish Bank being brought to trial, and these criminal proceedings seem unlikely to end in convictions. Their tracks seem to be well covered and even the symbolic act of bringing these individuals to trial is not enough to ameliorate the detrimental impact of austerity. As a result of growing frustration, the Irish public is taking to the streets, circulating petitions and airing their grievances at the ballot box.
The frustrations being brought into polling places are especially significant. Not only did smaller political parties and Independent TDs (independent politicians in each region not affiliated with a political party) gain ground, these smaller parties are largely of the left, including groups such as the Green Party, the Anti-Austerity Alliance and the Social Democrats and most of the Independent TDs are also left-leaning.
These smaller parties present a renewed focus on the development of social infrastructure across Ireland and address the widespread negative impacts of austerity. Parties such as the Anti-Austerity Alliance had a main aim of challenging wealth inequality, and the Green Party placing great emphasis on housing provisions and homelessness. Symbolically, these small parties offered a hope for Ireland to stand up to the European banking system, not unlike similar leftist parties in Greece and Spain.
Today, however, one month after the 2016 General Elections, former Taoiseach Enda Kenny, leader of Fine Gael and Micheál Martin, leader of Fianna Fail, are both trying to cobble together coalition governments after gaining a similar number of seats in the Dáil. Notably absent from these coalition-building attempts is any indication that the status-quo will be upended anytime soon; it is becoming evident that the calls for change in Irish politics have still not been answered and tit-for-tat politics are continuing as before.