Ireland On The Verge Of A Bailout?

I wish I could say it was a surprise but the recent developments in Ireland have been on the cards now for some time. It is something I identified a couple of years ago from just observing and voicing my concerns in many ways, I finally put pen to paper on this blog about the depressing situation in Ireland on February 8th. You can read that piece here: “Is Ireland Headed Toward A Depression?“

Back then, unemployment had increased greatly, similar to most other countries and despite the greatest efforts of the government to persuade us otherwise I was not convinced back then, anymore than I am convinced right now

“Unemployment is set to continue in Ireland. The middle class will continue to be subject to various pay reduction measures to increase the government revenue in order to stave off bankruptcy. This alone will not be enough though. The critical point will come when pensions are significantly targeted. While we may have seen some union strikes up to now, this will lead to a much more ferocious protest. People will not accept these cuts, especially when they believe that the banks are being bailed out because of who the are. The reality is much more grim in that the banks are actually being bailed out not for “who they are” but actually “what they have become”.

On December 7th, the government will deliver it’s budget to the Irish people and it is sure to be met with the disgust I have outlined above. Opposition political parties will rage at the lack of fairness in the new budget but do not be fooled by their cunning attacks. These cuts are not preferred but simply imperative. It is completely understandable that people will continue to call for a general election in the midst of one of the most hard hitting budgets in Irish history and indeed it is completely justified. It is quite extraordinary to think that the leader of this country, Brian Cowen, is the same person who was Minister for Finance when this ridiculous credit boom began in Ireland.

However, what people need to wake up to and acknowledge is that we must vote now, not for Fianna Fail, Fianna Gail, Labour etc, just because that is who we have been brought up to follow. No, this time around we must vote for policies themselves. Opposition parties have had a free ride up to now by criticizing the actions of governments in the past, but as of yet, they are not offering too many concrete solutions for how we adapt going forward. Until such time as they do, I remain skeptical, as I noted back in February:

“The big question is, where do we now focus our attentions? It is a question politicians will not fully address because in order to rebuild an entire system,  it is inevitable that we will suffer short-term hardships. This is the reality of the situation we are in but politicians of all parties continue their shameful propaganda and quest for votes by simply berating one another. This is neither productive nor helpful but the opposition is all too well aware that most votes come from the middle-lower class citizens of the country. As such they will continue to speak out against the “lack of fairness” in recent budgets in the hope to secure your votes. The truth of the matter is that once in power, these opposition parties will be helpless to engage in any other means of recovery other than to tackle the issue of public spending in this country. Any one who argues otherwise is either lying or just ignorant to the sad facts that present themselves today.”

With Europe armed and ready to bail out Ireland, it remains to be seen what the consequences will be. In my opinion, this country is crying out for a new political party, led by young energetic individuals who are willing to identify the problems of today, ensure justice is served by those who have primarily contributed to this disaster, and make the tough decisions needed going forwarded. At the same time, this new party will have to provide inspiration and hope to a nation of people who may have some dark days ahead. That is not to say that this is the end however. Ireland can and will resurrect itself in time but this time frame will depend on our willingness to make changes today for the future of the country. The public sector simply cannot be afforded the levels of pay/pensions that the country currently pays, the banking sector is a mess and needs to return to the older models of simply lending and deposits, while the Social Welfare in this country is an absolute joke. I do not even know where to begin my argument when it comes to the numerous able-bodied young men who now live at home, draw the dole happily and then simply drink the proceeds or go traveling on cheap holidays. None of this money is going back into the economy in a meaningful way. Why we cannot adopt measures similar to other countries whereby the dole is only provided for a period of up to 12-24 months is beyond me, but perhaps it is coming. People need to accept that the reign of free money has come to an end and each individual must stand up and look to regain their self-pride.

I remain convinced that we need to focus on Science, computer literacy, financial education and agriculture to get ourselves out of this mess. I acknowledge I am not privy to the insider dealings of the country and perhaps there are barriers to targeting these sectors but they are imperative in my view, a subject I touched on 9 months ago:

“It is clear Ireland needs to somehow reduce it’s deficits and increase it’s revenues, but how can we improve our productivity and increase our tax revenue base without simply taxing people to oblivion. While unions bombard us with the notion that simply “Education” is the key, that is not so. Being good at Geography, History and English may get people good points in their exams but we are missing the point. Why do we educate people…..to achieve a good Leaving Certificate, perhaps a good University degree but most importantly, to obtain a good job that ensures we are capable of supporting ourselves financially. However, what is the god damn point in educating people to make money when they don’t know how it actually operates? How many people bought houses without having a clue about mortgages during the boom period? How many people got themselves tangled up in all sort of financial loans and investments that turned sour because they did not understand the intricacies of how they actually work? The next generation needs to be different from us. The young kids in our school need an education in financial responsibility and how money works because in time, they will be responsible for managing the country’s finances. The current generation, and indeed the generation before us, has failed in this regard but now is the time to put it right.”

“We also need to ensure the next generation are computer literate and an emphasis should also be placed on Science education. I never liked Science during my school days and indeed dropped the subject before my final exams. However, I recently visited the Young Scientist competition in Dublin because my brother was participating and I have to admit I was blown away. Throughout the venue were hundreds of presentations on varying aspects of life. These students were doing what so many people fail to do, they were not only seeking answers to the difficult questions, they were providing these answers. Important issues such as energy efficiency, cancer and more were being dealt with. The entrepreneurial spirit and desire these young kids exude is enlightening. There is no doubt that with more support, many can provide us with todays solutions to tomorrows problems in my view. Hopefully we can ensure a stronger emphasis is placed on this type of education going forward because Science is a global education in which Ireland can prevail.”

On December 7th, a nation will holds it breath but by that time, it is conceivable that Europe will have already bailed out. I sincerely hope that I am wrong but I fear I am not. Ireland is set to suffer the hangover from one of the most speculative credit booms in modern history, the sad facts of which cannot be denied. My only hope is that once the public decide that enough is enough, things do not get ugly. That kind of response, in my opinion, can only be deferred in the near term by a general election. The people deserve a voice in black period and make no mistakes about it, if the current government do not grant them their demands, they will simply take it regardless.