Irish Welcome Foreign Helpers Dubliners Angry at Government Rather than IMF

For Ireland, it is the hour of truth as the government prepares to present its four-year plan. Draconian budget cuts are expected, but most Irish people are accepting them fatalistically. Most are angry at the government, rather than the experts from the IMF and the ECB.
A protester in Dublin: Most of the anger displayed this week has been against the government and bankers.

A protester in Dublin: Most of the anger displayed this week has been against the government and bankers.

Foto: Enda Doran/ dpa

The worst thing for many in Ireland is the international headlines. Anyone walking past a news agent in the Dublin city center is unable to avoid Ireland's new image in Europe. The headlines shout of the Irish people's "shame" and "humiliation."

"I am very ashamed," said Patricia Shaw. The 59-year-old accountant didn't think she would ever have to experience something like this. In the 1970s, she emigrated to London, like so many of her compatriots. She returned home in 2002, lured by the Irish economic boom.

And now this.

Some commentators are bitterly speaking of the "Republic of IMF." "Under new management," seared one Irish Independent cartoonist in the caption appearing next to a drawing of the country's new leaders: Thick pin-striped suit-wearing officials from the EU and the International Monetary Fund, who are watching over a witless Prime Minster Brian Cowen.

After weeks of resistance, the Irish government yielded to pressure and applied for aid from the euro rescue fund from the IMF and the European Union. The step turned the once-proud Celtic Tiger into the second country after Greece to become an official euro-zone economic basket case. The current talk is of a loan of up to €90 billion ($119 billion) for Ireland, which in sheer numbers would be smaller than the €110 billion given to Greece. Taken as a percentage of gross domestic product, however, the Irish bailout would be much bigger than the one received by Athens.

The Irish are even being forced to accept money from the British, a people from whom they had to fight for their independence over 80 years ago. Ireland's larger next-door neighbor has said it is prepared to contribute a loan of €7 billion ($9.3 billion) to the resuce. What Ireland is expected to give up in return is currently being negotiated with IMF experts.

'Better Chopra than Our Hopeless Lot'

On the streets of Dublin, anger over the foreign paternalism appears to be limited. Passers-by in the city's main shopping streets seem relieved that someone is finally keeping a close eye on the conservative-Green coalition government. "I am very pleased that the IMF is here," said dentist Margaret Shannon."The government is incompetent and corrupt."

"The people are delighted that experts are now in charge," said Brian Lucey, a finance professor at Dublin's presitigious Trinity College. Indeed, there are few signs of major protest in the Irish capital. A lone poster from the Socialist Party hangs on a lantern post in front of parliament, inviting people to an "public meeting" to oppose any drastic remedy the IMF might propose.

But the people's anger is largely directed at Prime Minister Cowen's government, which is to present its four-year plan on Wednesday afternoon. The conservative politician has frittered away any remaining trust. After his party's junior coalition partner, the Greens withdrew their support for Cowen on Monday, the prime minister was forced to announce that new elections would be held in the beginning of 2011. Now it appears to be just a matter of time before he steps down.

In recent days, desperation over the country's political leadership has at times taken a turn for the ugly. Ministers driving to work in their official vehicles have been cursed at. A few dozen members of the opposition Sinn Féin stormed the gates of the parliament building. And on Monday evening, there were angry attacks on the Irish public broadcaster RTE's "Frontline" talk show against Energy Minister Eamon Ryan, a member of the Green Party. Labor leaders have called on the country's union members to convene for a major protest comprising several tens of thousands of people on Saturday.

The emissaries from the IMF and EU, on the other hand, are being perceived here as rescuers. "Better Chopra than our hopeless lot," summed up the tenor of reader letters sent in to the Irish Independent newspaper. Ajai Chopra is the leader of the IMF's expert team in Dublin.

"We know that we have to take our medicine," Shaw said. "We have partied for years and now we have to atone for it. It's a very Catholic feeling of guilt."

The four-year plan to be presented by the government on Wednesday is being anticipated with a certain amount of fatalism. The framework is already known: €15 billion is to be saved by 2014, including €6 billion next year alone. Some details have already been leaked and the cuts will affect almost all parts of Irish society.

  • A property tax will be levied for the first time.

  • The minimum wage will be lowered by one euro to €7.65.

  • University registration fees will be raised from a current €1,500 to €2,000 per year.

  • The level for rising to the next highest tax bracket will be lowered.

  • Transfer payments like subsidies for children, housing and unemployment benefits will be reduced by 11 percent by 2014.

  • Around 20,000 jobs are to be cut in the public sector.

In other European countries, people would probably storm the barricades if they faced cuts like that. Not so in Ireland, though. Most have long since been resigned to the situation. Stephen Geoghegan, 53, a gardener at Trinity College, said he was prepared for a significant salary cut. He says he currently earns €509 a week. "What can I do?" he asked. "We just have to accept it."

'Why Do We Have To Help Pay for You Now?'

The truth is that the Irish government enjoyed a few luxuries during the fat years. The country's civil servants are amongst the best-paid in Europe. Ireland's minimum wage is the second-highest in Europe. And, at just 12.5 percent, its corporate tax is the lowest.

Brian D., a 50-year-old trained plumber who did not want to state his last name for publication, said the dismantling of the social welfare state is long overdue. "The government has made it too easy for people not to work," the small businessman said. "They continually increased the size of the welfare state in order to buy votes. Now they need to reduce it again. Then the prices will finally fall."

He also greeted the IMF rescue, presuming they "force the banks to pass their money on to companies and private individuals." He said his business has almost stalled because he is unable to obtain any further loans for purchasing houses and renovating them.

Nor, the plumber said, is he bothered by the fact that guidelines from Brussels and Washington will now be imposed on Ireland. "If we want to be honest about it, we were never independent," he said. After all, he said, the Irish boom had been financed by EU subsidies and American investments.

Nevertheless, the aid from abroad is still uncomfortable for many -- not least of which because they are listening to the criticism from their EU partner countries loudly and clearly. "My British colleagues are asking me why do we have to help pay for you now?" explained Laura Geraghty, 21, who studies in Belfast in the Northern Ireland and works in a call center.

At Trinity College, Finance Professor Lucey says the rescue action will only have made sense in the end if the Irish banking sector is fundamentally restructured. In the end, he feels, there should be fewer financial institutions, but those that still exist should be more solidly financed -- possibly even under the ownership of Germany's Deutsche Bank or Spain's Santander.

At the moment, unfortunately, it appears the IMF and the European Central Bank primarily want to ensure that the international lender banks get their money back from Ireland and that Irish taxpayers will be saddled with the costs, said Lucey. The professor argues that lenders, which include British banks but German financial institutions in particular, should also be required to assume part of the losses relating to Irish real estate speculation.

"It won't help if we are just left with greater debts in the end," Lucey said.

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