Abortion debate underway in Ireland - hard questions need to be asked and the country's Catholic history reviewed

A pro-life poster in Dublin to publicize a rally.

Here's a question for you on abortion -- imagine you have a pregnant daughter who has developed a medical condition which will mean that if she continues with the pregnancy and has the baby her health in the future may be damaged.   She may not die, but her long-term health may be compromised.

What do you do?  Do you encourage her to have an abortion, or do you advise her to take the chance and go ahead with the pregnancy for the sake of the fetus she is carrying?

There is no easy answer to a question like this.  Even if you believe in a woman's right to choose, is an abortion in such circumstances right if your daughter is half way through her pregnancy?  Or is the line of acceptability even later or much earlier in her pregnancy?

Let's take a different scenario, one in which no health issues are involved, the woman is healthy and the pregnancy is progressing normally.   In many western countries the right of a woman to choose whether to continue with a pregnancy is accepted up to the end of the first trimester, or 12 weeks. 

The rules vary -- in many countries a woman is expected to give physical or psychological reasons why she cannot continue -- but in practice the decision is hers. 

Beyond that time frame it becomes more difficult, with a wide variation in what is permissible. Between 12 and 20 weeks, abortions in some countries can be difficult to get, with more assessment and paper work required.  Late term abortions (at 20 weeks or later) are contentious even in liberal countries.    

Even countries which have had legislation and services in place for years still find abortion a difficult matter to deal with, the U.S. being an example.  In cases of incest or rape, or serious fetal abnormality, early abortions are accepted without question in many countries, although even these are opposed by many in the pro-life movement.  

So to repeat, there are no easy answers to questions about abortion. 

The debate in other countries has been going on for decades.  Here in Ireland -- Holy Catholic Ireland -- somehow we never got around to it. 

Instead we exported the problem and turned a blind eye as thousands of Irish women every year traveled to Britain for an abortion.  This allowed us to adopt a superior moral position and claim that there was no abortion in Ireland.  Talk about being holier than thou!

As societies in the west faced reality over the past 50 years or more and became more conscious of the rights of women, legislative changes happened elsewhere allowing abortion in defined circumstances. 

Aware that this was happening elsewhere, in Ireland around 30 years ago conservative Catholics got together and campaigned for a constitutional amendment which would prevent the introduction of abortion in Ireland.   They believed this would prevent a government sneaking abortion in by legislation. 

To introduce abortion, a government would have to have a referendum (a national vote) to remove the constitutional prohibition.

The Catholic fundamentalists put pressure on our politicians to introduce a constitutional amendment and our gutless politicians, afraid to refuse because it might give the impression that they were pro-abortion, went along with the idea.

The 1983 referendum was passed after a bitter debate. It inserted wording into the Constitution which acknowledged the right to life of the unborn and the equal right to life of the mother.  

This lacked definition, although it seemed to mean that any abortion from the moment of conception was unacceptable, even in cases of rape or incest or fetal abnormality.  It also failed to define exactly what would happen if there were a conflict between the life of the fetus and a very sick mother.  

This might have been cleared up to some degree if legislation had followed, but none did.  There were many liberal voices in Ireland at the time -- this happened in the 1980s, not the 1950s -- who warned that this was a dangerous legal situation, leaving doctors and women vulnerable, and could result in deaths in Irish hospitals. 

The 1861 law we had inherited from the British meant that abortion was already illegal in all circumstances, and it could be argued that the amendment had modified the application of that.  But no one was sure and successive governments were too cowardly to legislate.     

Nine years later, in 1992, we had the X case.  X was a 14 year old girl who became pregnant after statutory rape and was suicidal.  Her parents made preparations to take her to Britain for an abortion, which she wanted, but the attorney general in Ireland got an injunction in the High Court to stop her traveling.

The case caused uproar and Ireland was compared to a police state like East Germany.

After an appeal, the Supreme Court decided that the girl could travel because evidence showed her to be suicidal and therefore she had a right to an abortion under the 1983 referendum wording which guaranteed "the equal right to life of the mother."

In its decision, the Supreme Court said that the girl could have an abortion because there was a real and substantial risk to her life, instead of just to her health. 

In fact the girl had a miscarriage shortly after the Supreme Court judgment.  But the phrase "a real and substantial risk to the life of a woman, as opposed to her health" became the test by which medical staff would work to from then on.  

But again, there was no legislation to give clarity to what the Supreme Court finding would mean in medical situations.

Another referendum was quickly held and passed on the right of women to travel and to information about abortion.  A third part of that referendum to remove possible suicide as grounds for an abortion was rejected by the people.  A further attempt 10 years later, in 2002, to remove the suicide grounds, also failed.  

Over all this time -- it's now 20 years since the X case -- there has been no legislation to bring clarity to the grounds for abortion in Ireland.   Twenty years ago the Supreme Court produced a broad principle based on the Constitution, but we need detailed legislation to make clear what medical staff are allowed to do in our hospitals.

The failure to do this may have been what killed Savita Halappanavar, the unfortunate Indian woman who died in a Galway hospital last year.  That caused uproar here, and rightly so. 

We are still awaiting the findings of the official investigation into what happened.  But there seems to be little doubt that some of the medical staff in the hospital felt that the Constitution prevented them from acting on the woman's requests for an immediate termination to end her prolonged miscarriage. 
She died from septicemia.

That appalling case put abortion back on the public agenda here.  But it was already on the government's agenda because the European Court of Human Rights a couple of years ago demanded action here on legislation after several women brought cases to Europe seeking clarity. 

The present government set up an expert group to report on possible abortion legislation and that took a year or more to produce its advice, giving several options. 

The one the government is going for -- the only one that makes any kind of sense -- will allow for abortion here under very restrictive conditions.   A request for an abortion may have to be approved by not one but two senior doctors, for example. 

Last week saw the debate on abortion opened out into the public arena when the outline for proposed legislation was the subject of three days of special hearings before the Oireachtas (Parliament) Joint Health Committee.

The committee was given the task of hearing testimony and preparing a report for the minister for health who will bring in the legislation for abortion in Ireland.

All the interest groups trooped in to have their say, the doctors, lawyers, constitutional experts, campaign organizations both pro-life and pro-choice,  religious groups and even the atheists.  (This was another tactic by the government to widen responsibility for whatever happens by consulting everyone, and they are playing it brilliantly.)

To everyone's surprise, the presentations and questions proceeded in a mature, civilized fashion, a welcome contrast with the hysteria that gripped the country in the 1980s.  Maybe we've grown up a bit since then. 

There was most concern at the hearings about the so-called suicide risk -- where a pregnant woman claims she must have an abortion because the pregnancy is making her suicidal.  Twenty years ago Catholic fundamentalists here tried to have the suicide option ruled out, but this was rejected by the people in two national votes.  Despite this, they are at it again.

The likely result is that a suicide risk as the grounds for an abortion will be very restricted, with possibly two senior doctors, one of them a psychiatrist, needing to give their approval.  There is also likely to be an appeal system when a woman is not happy with what the doctors decide and that could take a final decision even further away. 

Another idea is that the decision will involve doctors from more than one hospital.   It all sounds like a lengthy and difficult way of dealing with these situations.

One organization giving its views to the committee last week was the Catholic Church, with a bishop present to lay down the law.  And that's what he did. Some things never change. 

The arrogance from such a discredited organization is breathtaking.  One reader of the Irish Independent reacted by posing the question, “What do they want, more unwanted babies who will have to be adopted and taken into institutions where they will be fodder for abusing priests?”

That may be a bit extreme, but the reader had a point.

There will be more detailed coverage of the church's position here as the abortion debate develops in the weeks ahead. 

A budget of a thousand cuts is the latest austerity measure for the Irish

A young boy joined carers to protest last week’s budget cuts 
outside Leinster House in Dublin on Tuesday morning.

There were no big surprises in the budget in Ireland last week, the sixth so-called austerity budget in a row as the government battles to raise taxes and cut spending to match revenue. 

The reason was that all the bad news had been slowly leaked out over the previous few weeks to lessen the impact on the day.

So we knew all about property tax and increases in payroll "social" tax and cuts in child benefit payments and other adjustments like extra tax on alcohol, tobacco and cars.    

We didn't know about some of the "adjustments,” one of them being the cut in respite payments to carers, something that has proved to be so contentious that it could yet destabilize the government even though the overall amount involved is relatively small in terms of overall state spending. 

Carers are people who look after other people at home on a full-time basis -- like a parent looking after a severely handicapped child or someone looking after an elderly parent with Alzheimer's.

From the state's point of view, these people should be treated like heroes since they keep the loved ones they care for out of hospitals where long term care would cost a fortune.  The amount saved by the state as a result has been estimated at around €4 billion a year. 

Carers here get a basic payment of just over €200 a week from the state, and they also were getting an annual respite payment of €1675, to allow them have some "respite,” a short holiday or break from what is usually a demanding, year round 24/7 commitment. In this budget, that respite payment has been cut by €300. 

A meaner, nastier cut is hard to imagine.  This would be true even if most carers used the money for the respite break they were supposed to take. 

In fact, however, many of them were using the money not for a holiday but to tax or insure the car they need to take the person they care for out of the house occasionally, to medical appointments and so on.  Or they were using it to fill the heating oil tank for the winter, since many immobile people needing care also need higher home heating than healthy people.   

This is just one of numerous small cuts that were made in the budget in areas of state spending that affect the lives of the poorest or the most vulnerable in our society.  Extra payments for medicines for the poor is an example of another.  And there are many, many more.

But it's not just the poor and vulnerable who will have their lives made more vulnerable by this budget.  The lower to middle income families across the country are going to be hard hit as well.  These are the so-called coping class.

The trouble is since the boom and bust many of them are just not coping anymore.   And they now find that they are being squeezed even more.

Many of these would be people who bought properties over the past decade for which they paid boom time prices and which are now in negative equity.  They are struggling to pay their mortgages already and are now being hit with a new property tax.

They paid heavy stamp duty (like a sales tax) when they bought their homes.  It was six percent on an average house and nine percent on expensive properties.

During the boom it was quite normal to pay stamp duty of €20,000 to €50,000 when buying a property. People simply added it to the mortgage, borrowing enough to pay for both the house and the stamp duty.  And this is part of the reason so many people are now struggling to make their mortgage payments.

There was a wide expectation that when the new property tax was introduced in this budget, people who had paid heavy stamp duty in recent years would be allowed to offset that against their tax bill.   Instead they have to pay up the full amount of property tax like anyone else.

It's double taxation and it's clearly unfair.  But the government went ahead with this anyway.

Similarly, the government made no attempt to target child benefit cuts at people who don't really need the payments.  The payments are universal so all families get them, rich and poor. Taxing them would have taken about half of this money back from better-off families, while leaving payments to poor families intact. Instead of doing that, the government did an across the board cut which will hit every family in the country.

The property tax and child benefit cut will have most impact on ordinary middle income families here, with most of them down around €2,000 a year.  That may not sound a lot, but for families who are already living on the margins after a succession of austerity budgets it will make life even more miserable.

On top of the cuts, there are the extra charges and tax that people will have to pay.  The main one is the PRSI social tax (which is supposed to help pay the state's welfare bill) which is being hiked up.

Of course it's really an income tax since it is deducted directly from pay.  The effect will be to bring the marginal rate of tax on income for many ordinary people to well over 50 percent.

The problem for many families is that while they are being squeezed dry by the government, many of the "luxuries" that are in reality essentials for many of them are costing more and more.  The government is increasing annual tax on cars, for example, and petrol (gas) is going up as well. 

Some might say that a car is a luxury, but if you're stuck in a new housing estate miles away from work and schools and there is little or no public transport nearby, what do you do?

This felt like a budget of a thousand small cuts,  many of them hidden.  The cut to the carers respite payment, for example, hardly registered in the media on budget day but is now the hottest issue  facing the government. 

The reason all these small miseries were imposed by the government is that they began the task of making the €3.5 billion adjustment with the three biggest items in the budget off the table.  These were income tax rates, basic welfare rates and the Croke Park agreement on pay and pensions for state workers. 

Fine Gael and Labor made pre-election promises that income tax rates and basic welfare rates would not be touched, rash promises that have now come back to haunt them.

So there was no change in the basic income tax rates (although there was the hike in the PRSI "social" tax on incomes which has the same affect.)  And there were no changes in basic welfare payments like unemployment benefit and old age pensions (although the length of non-means tested jobless benefit was shortened and better off pensioners will now have to pay more of their own medical bills).

A much more imaginative approach to income tax and welfare and the link between the two could have been started in this budget and needs to be done soon if we are to incentivize business creators and workers to help us get out of the slump we are in.

The Irish welfare system pays people not to work and gives them many extra benefits for not having a job.  In Germany more than a decade ago the welfare system was changed so that welfare payments there pay jobless people to work in all kinds of activities like community service programs and so on.  You get very little for free unless you give back to society.

The Croke Park Agreement which guarantees pay levels and pensions in the public service (all state workers) was a major logjam in this budget.   In the big spending departments like health and education up to 80 percent of spending is on pay and pensions for staff, but because pay cuts are ruled out, making any meaningful cuts in their budgets involves hitting frontline services.

So, for example,  although school teacher's pay is not being cut, class sizes are going up (which affects students).

While student grants in universities are being delayed and student fees are going up, university teachers' pay (probably the highest in Europe) remains untouched.   

Then there is the scandal of the pensions for state workers which go on being paid at levels that are twice what many people who spent their working lives in the private sector paying into pension private schemes end up with.   And this is continuing while the state is desperately trying to save small amounts of money by cutting things like the carers respite payment.

This budget was not just unfair; it was incompetent and cowardly.  Instead of some blue sky thinking we got more of the same old ideas, a myriad of minor changes that eat away at the living standards of ordinary people.

And of course here was no mention in the budget of the elephant in the room, the huge burden of the banking debt repayments Irish taxpayers have been lumbered with and which are going to cost us billions in the years ahead, money the government might as well pour down the drain.   If the government had any backbone it would have told the European Central Bank by now that this party is
over.

It all makes a very bleak prospect for Christmas and the New Year.

Ordinary Irish suffer yet again as savage budget cuts will hit poorest

A Santa Claus protester held up a sign at a protest in Dublin last month.

This is budget week in Ireland but the bad news -- and it's going to be very bad news -- won't be revealed until Wednesday afternoon when the Minister for Finance Michael Noonan reads his Budget 2013 speech to the Dail (Parliament).  

So it will be after this column has gone to bed when the gory details of the Budget 2013 nightmare will emerge.  Of course we do know roughly what's going to happen, since we are no longer masters of our own economic sovereignty.  

That privilege belongs to the Troika (the EU, ECB and IMF) who lent us the bailout money to stay afloat three years ago and now lay down the law on our stony pathway back to fiscal balance and sustainability.

To meet the target for 2013 in the Troika's plan for Ireland, we have to reduce our budget deficit in the coming year by another €3.5 billion.  The government has said already that two thirds of this adjustment will be achieved by spending cuts, and one third by tax hikes.  That much is clear.

Also clear is that there will be a property tax, one of the things that the Troika is insisting on as a way of providing a steady revenue source for the state, like in the U.S. and most other countries in Europe.  

Part of the reason Ireland is in this mess is that property taxes here only applied when a property was sold, so when the market collapsed so did state revenue.    

Another change the Troika are keen to see is a targeting of welfare benefits so that only those in genuine need will get them; under our present system some welfare payments, like child benefit payments, are universal, going to all families regardless of income.

So we know the parameters of this budget. We even know some of the likely measures it will contain thanks to leaks to the media in the past few weeks as the coalition partners in the government, Fine Gael and Labor, have struggled to agree on what to do.  

As long as we follow the broad guidelines set down by the Troika and hit the target for next year's reduction in our budget deficit, the government is free to work out the small details of the spending cuts and tax hikes by itself.  

That's what the Troika says.  But, as always, the devil is in the detail.    

One reason this budget is so difficult is that over the last few years each annual budget has cut spending and found new ways of adding extra taxation.  There are no easy options left.

Some of the most obvious waste in spending has been stopped.  Hidden areas that could yield extra revenue have been exposed and taxed.   Most of the low hanging revenue fruit has already been picked as we tried to cut the deficit by a few billion over the past few years.  Now on top of that we have to find another €3.5 billion in cuts.  

Another reason getting the figures in this budget to add up is so difficult is because of the rash promises made in the election two years ago by Fine Gael and Labor. Fine Gael promised no income tax increases, while Labor pledged that core welfare benefits would not be cut.  Clearly, since we are now scraping the bottom of the barrel, something has to give on these promises.  

We have one of the most generous welfare systems in Europe, with benefits paid at very high levels.  Welfare for those out of work is more than one third higher than similar payments in Britain, for example. The basic state pension here is also much higher than in Britain and in most other European countries.  

Other state payments here -- like the aforementioned child benefits – and payments in many other smaller entitlement programs, are extraordinarily high in comparison with other countries.

An example would be statutory maternal leave from work, with an Irish mother entitled to 42 weeks leave from her job after having a baby, 26 weeks of which is paid for by the state at a rate of around €250 to €300 a week and may be topped up more by her employer.

The last time I looked there was no mandated maternity leave with pay in the U.S.  I'm not saying that is a good thing, but the contrast with Ireland is striking.

The bottom line here is that Ireland has become very much a welfare state on European lines in recent decades, and over the recent boom many of these entitlement programs and payments were inflated supposedly for social reasons but in reality to buy votes in elections.  

This has resulted in a situation in which some lower income families here find it as rewarding (and a lot easier) to live off the state than to hold down jobs.

By the time you add up the value of unemployment benefits, rent allowance, fuel allowance, other allowances, free family health care for those out of work and other payments, it is hard for employers to match the value in pay.  Plus staying home saves travels costs and other expenses.  

Saying this here is heresy, of course, because it challenges the orthodox perspective; one economist who was foolhardy enough to do so last year was bitterly criticized.

But the evidence is all around us and the effects on our society are clear.  

The trouble with entitlement programs paid at a high level is that they quickly become the norm for those who receive them. Cutting the level of payments leads to a ferocious backlash and accusations that the vulnerable are being targeted.

We have already seen this here in the “grey power” reaction when the government tried to take free health care away from better off pensioners who could afford to pay for their own medical needs.

Any objective assessment of Ireland's welfare system and other state programs which give people entitlements to services which some could pay for will show that they are very generous by the standards of other countries.

The simple truth is that the country cannot afford this anymore.  And we cannot go on borrowing to pay for it.  So reductions are inevitable.  

If the Labor Party insists that "core" welfare payments cannot be cut, then higher eligibility requirements to reduce the number getting payments will be needed.  

The other big item on the spending side of the budget equation is the pay of state workers here, which is protected under the Croke Park Agreement.   This agreement was supposed to deliver efficiencies that would allow the government to cut costs by reducing numbers while maintaining pay levels.  

It has not worked, no matter what the unions say.  Pay levels here for middle and senior workers on the state payroll (civil servants in government departments, doctors, nurses, teachers, police, and so on) all remain high by European standards and take no account of the state being bust.

It has now emerged, for example, that teachers here are entitled to an extra six weeks paid maternity leave on top of that outlined above, despite the fact that they already get long summer holidays when the schools are closed!    

On the revenue side of the budget equation, there is now widespread acceptance that we are at, or close to, the maximum level at which income tax can be applied here.  Our top rate is 41 percent, but there are two additional "social" taxes applied to income which bring it to well above 50 percent.  

The top rate kicks in at a relatively low level of income, equivalent to around $40,000 for a single person.  As a single person, anything you earn above that level, you lose about half of it in tax.  

As if that was not enough, all the other indirect taxes, like sales taxes, motor vehicle taxes, fuel tax, levies on pensions savings and insurance policy taxes -- there's a tax here on almost everything you do apart from breathing -- have all been ratcheted up over the past three years as the government tries to squeeze more and more revenue out of ordinary people.

And of course the property crash has left a lot of people in negative equity, struggling to pay high mortgages for houses that they cannot sell even if they want to.

What all of this means is that in this budget the government needs to show a new approach and some new thinking.   It's not enough to tinker with the present tax and spend structure anymore.  Radical reform and change is required, particularly on the spending side.

The Irish state -- government, civil service and all the rest of it -- is now much bigger than the country can sustain.  How many non-governmental organizations (quangos) with staff on the state payroll and with guaranteed state pensions can we afford?

There are hundreds of them and, despite promises, only a handful have been wound up. How many embassies do we need?  How big an army?  The population of Ireland is only half the size of London, yet we have to carry the expense of an entire country, one led by politicians with serious delusions of grandeur.
There is no sign of us tackling any of the sacred cows in Irish life.  An example would be the costs associated with the pretence that we are reviving the Irish language.

We go on paying teachers to spend hours every day teaching compulsory Irish in schools even though no European languages (or Chinese, or Russian) are taught in Irish junior schools and companies like Google have to import hundreds of workers here as a result to fill jobs in customer support services.

And we go on paying for not only a full Irish language news service but an Irish TV station, even though research shows that the audience is tiny.

I have nothing against Irish.  It is just one example of the many sacred cows in Irish life which cost a fortune and which we can no longer afford.  Long may Irish continue, but it has to stand on its own legs and so do all the other sacred cows we have here, instead of being supported by the taxpayer.

Any serious examination of Irish public life shows up wide areas of very expensive government activity which really have no place in a country that is broke.

Our Arts Council, for example, had a budget this year of over €60 million to promote the arts.  Close to €1 million was spent on a week of Wagner concerts in Dublin.  

Again, I'm all for the arts, but are the people who stand over this kind of thing living in the real world?

In an effort to save money, while continuing to pay obscene pensions to retired bankers and top civil servants, the government has cut the number of home help hours to families with disabled children, elderly people who need round the clock care and so on. In doing so they are undermining a program designed to keep such people out of hospital by helping families to look after them at home.

But then these vulnerable people -- and the family members who look after them -- are not among the sacred cows of Irish life. That's what is wrong with our attempts to reform our state finances.  

Mean, miserable cuts and extra taxes are loaded on to ordinary people here while the lofty pretensions of the Irish state carry on regardless.  To change this requires a fundamental shift in thinking at the top.  

Bold, radical moves to curtail state spending while protecting the vulnerable are possible.  But they would require the wholesale slaughter of sacred cows.  

That makes it very unlikely that we will see any real change in approach in this week's budget.  What we are likely to see is the status quo in Irish society -- and their pay, often state pay, and guaranteed pensions - being protected as much as possible.

Meanwhile, all the middle income people will be forced to pay even more to keep the circus on the road.  They will be forced to pay more even though research this year showed that, after paying all their essential bills, 1.8 million people here had only €100 a month left over for themselves.

The gigantic elephant in the room in this debate is, of course, the repayments the country is making on the banking debts that were "guaranteed" by the state, which means they were transferred to the taxpayer.   Just to deal with the two worst banks involved, Anglo and Irish Nationwide, is costing us over €50 billion.

The two had €31 billion in debts, mainly to foreign bondholders, and we borrowed the money to pay this back.  The bondholders have now all been paid back and we're scheduled to pay that borrowing back over 20 years or so, at around €3 billion a year (the interest bill is around €19billion).  

The last government was railroaded into this by the ECB, because they feared a collapse of any Irish banks would cause financial contagion across Europe.  There is no moral basis for it whatsoever.  The two banks are now closed.

The bondholders should have been burned. Instead this huge unsustainable debt was loaded on to Irish taxpayers.  

The other banks here, between them, have had another €30 billion pumped in so they could pay their debts, and again the Irish taxpayer ends up carrying the can.  

So all the pain that will be unleashed this week to narrow the budget deficit by €3.5 billion will be unnecessary suffering because we will be sending roughly the same amount out of the country in debt repayments.  And this is set to go on year after year, until 2030 and beyond.

Last week Greece was given another debt forgiveness package by the Troika. But this government has managed to get nothing for Ireland.  

So we go on paying.  Is it any wonder so many young people are leaving?

Unemployment, emigration and Ireland’s economy - more pressing issues than children’s rights

President Michael D. Higgins and wife Sabina cast their referendum votes

Why should we vote, my kids asked me as we trooped down to the polling station on Saturday evening.

The referendum is going to be passed anyway, they said in long suffering voices, conscious of the TV show they were missing. 

Apart from a few mad, far right Christians, everyone is in favor of children's rights, so everyone is going to vote yes, they said.  So we're wasting our time. 

I argued back about people in some places in America lining up for hours to vote for President Obama, about how precious democracy is, about how it's always important to have your say.   Inside, however, I was silently agreeing with them.

The referendum last Saturday on putting basic rights for children, separate from the rights of families, into our Constitution was sure to be passed by a massive majority. 

Our Constitution has always been weighted towards family rights because of our Catholic heritage.  And as our society has changed this has caused problems because children had few rights as individuals. 

It was more difficult than it should be for the state to intervene in highly dysfunctional families where children were at serious risk.  One practical problem was how difficult it was for long term foster parents to adopt children who needed a second chance -- and there were dozens of such cases on the books. 

So change was needed and almost everyone agreed with that, including all the political parties and all the media.  The only ones who disagreed were the fundamentalists who saw this as another attack on Catholic families.  They are the same lunatic fringe who opposed contraception and divorce, and there are only a few of them around these days.

So yes, as we walked in to vote on Saturday night it seemed certain that the referendum on children's rights would be passed by an overwhelming yes vote.  How wrong can you be?   

The referendum was passed all right, but by 58 percent to 42 percent, a much smaller margin than was predicted.

Even worse, only one in three of those eligible to vote in the country turned out, making it one of the lowest referendum votes we have ever had.   As the figures came in on Sunday afternoon, we were suddenly glad of our decision to head out to vote the night before, when it would have been far easier to stay at home and watch The X Factor.

So what happened?  Have we turned back into fundamentalist Holy Catholic Ireland where priests rule? Not really.  But something almost as disturbing is going on.

One of the reasons people didn't bother, apart from the general view that the yes side was going to win easily, was because they felt it didn't matter that much in practical terms. 

Yes, putting children's rights into the Constitution is a good idea.  But far more important is having the funds for enough social workers to tackle the real problems that many kids face when their parents are drugged, drunk and generally incapable of looking after them.  And that's before we even mention other aspects of what goes on, like violence and sexual abuse. 

Life can be very raw and rough in the deprived suburbs around our cities, just as it can be in similar areas in New York or LA or any other big city.  Having protection for kids written into the Constitution is great, but it's no use if there's no money to back up the social services that are needed for intervention in crisis situations. 

That was one factor.  Another was the feeling that, important though children's rights are, there are much more immediate issues to be dealt with by this government at the moment.

Issues like unemployment, emigration and the economic mess we have to deal with.  People are so worried and beaten down by these issues that at the moment they really can't cope with other things, like Constitutional reforms, no matter how worthy they are.

And that is linked to what I believe was the major reason that so many people here didn't bother to vote.  The government has lost its moral authority and many people have lost respect for and trust in what it says. 

In addition to that many people, including many who voted this government into power nearly two years ago, are now extremely angry with the way things have turned out.  In particular they are furious about the way the government has failed to moderate the pay and pensions of the upper layer of our society while everyone else is struggling to pay the bills and survive. 

This referendum gave this huge swell of angry people a chance to register some kind of protest.  They were never going to vote no.  But given their disgust with the government they just could not bring themselves to go out and vote yes, because that was what the government was asking them to do. 

A high yes vote would have been seized on as a kind of positive approval rating by the government, and that's the last thing many voters here want to give them right now. 

In the past two weeks, more and more revelations have come out about the high pay and high guaranteed pensions for life that so many people here have in politics, the banks, the judiciary, the civil service and many other areas in the state sector, where middle and senior staff have deals that the rest of us can only dream about.   

Some of the stuff that is now being revealed is so outrageous that it's almost past belief.  The details of the astronomical pay and pensions in the banks in particular is making people's blood boil, not least because our banks are now effectively owned by the state. 

Last week details of pay and pensions in Anglo, the renegade bank that was the main driver of our economic collapse, were published, with everyone on huge boom time salaries. 

At the same time that the government is cutting home help hours (the minimal service provided for disabled people in their homes) they are telling people that they can do nothing about the huge pay and pension deals that the top bank executives are on.

The pensions debate, in particular, has fuelled an outpouring of anger.  We have all these pillars of Irish society (like Mary Robinson, or the current President Michael D. Higgins) who are all on, or soon to be on, not just one pension but two or three.   The same applies to the politicians who got us into this financial mess. 

The senior civil servants and regulators who were supposed to stop it happening are all on huge guaranteed pensions as well.  And it carries on down the chain across the state sector, with everyone in line for a nice pension.  

Unlike private sector pensions, all these state pensions are funded out of current revenue (or state borrowing).  There is no pension fund to go bust, as has happened to 80 percent of private pensions here.  The state just keeps on borrowing and paying.

This guaranteed pension regime for everyone on the state payroll also apples to most people in the hundreds of government sponsored organizations (a/k/a the quangos) we have and in the semi-state sector, which is why there is an Aer Lingus strike on the way.  Their pension fund is completely bust, but they want the state to bail them out (and you can be sure higher fares and airport charges will be used to make the rest of us pay for that.)

In the real world, when a pension fund goes bust most private companies can't afford to rescue it.  Many companies have gone bust and brought their pension funds down with them. 

One Waterford Glass worker was on radio this week explaining that after his long years of hard work there he was supposed to get a pension of €600 a week.   He is now getting €15 a week. 

Meanwhile, all the state workers are retiring on roughly half their final salary and it's guaranteed for life.  Why should they be different?  The government's answer to this is an uncomfortable silence. 

These pay and pension issues are the real and immediate concerns of people here now, not children's rights.  That's why the vote was so low.   

That and the perception that this government has completely lost the plot.  They came into power promising to force a major deal out of Europe on our banking debt, which should never have been loaded on to the Irish taxpayer in the way that it was.  They have failed to deliver on that. 

Instead, they have kept to the EU/IMF bailout program by cutting spending and raising taxes for ordinary people, while letting the upper tier of the state sector here off the hook. 

There is no equity in what they are doing.  Yet they seem to be blissfully unaware of this and of the sinking regard that people here have for them. 

Why else would Taoiseach (Prime Minister) Enda Kenny think that it was OK to leave the sinking ship behind and head off to Berlin (where else!) a week ago to collect his European of the Year award?  He accepted it on behalf of the Irish people, of course. 

Thanks for nothing, Enda.  

Let’s get a European divorce -- Angela Merkel drops a bomb on Enda Kenny over Ireland’s debt deals

Enda Kenny meets with Lithuanian President Dalia Grybauskaite 
and German Chancellor Angela Merkel in Brussels last week.

This past week has been a humiliating one for Ireland, thanks to the rebuff given to Taoiseach (Prime Minister) Enda Kenny. 

After months of attempts to ingratiate himself with German Chancellor Angela Merkel in a manner that most people here regard as demeaning, including lots of kissy kissy stuff on red carpets, Kenny was brought back down to earth with a bang last Friday. 

Merkel dropped him like an unwanted boyfriend.  She didn't even bother to let him down gently. There would be no retrospective deal on banking debts, she said in an interview after a meeting of EU leaders in Brussels.

She was answering complicated questions about the Spanish economy at the time, but the implied message for Ireland was clear. The deal we have been pushing so desperately for on our "legacy" bank debt is a pipe dream.  We can forget it.

Merkel's comments caused consternation in Dublin and the phone lines to Germany were busy over the weekend, as officials pleaded for a more nuanced statement from her that would not leave Kenny looking like a lovesick fool.   And eventually after a 30 minute phone conversation between Kenny and Merkel, an agreed statement by both was issued which referred to Ireland as a "special case." 
It was the kind of support that could mean anything.   The truth is that she had let the cat out of the bag.  

For the past year and a half -- in fact since the day it came into office -- this government's main priority has been to get a better deal on the enormous banking debt that is suffocating the country.  
Kenny and his Minister for Finance Michael Noonan have been engaged in a charm offensive, sweet talking the other nations in Europe, particularly the Germans and the French, to convince them that Ireland deserves some kind of bank debt relief.   

We have toed the austerity line.  We have done everything Europe and the troika have asked of us.  We have been held up as the bailout poster boys of Europe, the proof that an economy can be fixed if cutbacks are implemented and a program is followed.      

We are not there yet, of course.  But we are heading in the right direction.

We have been able to show the rest of Europe that we are slowly getting our spending under control and our economy back on track again.  We have been able to show that we are tackling our budget deficits and that we will be able to deal with the sovereign debt that those deficits have built up, difficult though that will be.  

But we have also told Europe repeatedly that our mountain of banking debt is just too big for us to carry.  Repayments on a debt that size would condemn us to recession and poverty for decades and are doomed to failure anyway because it would be impossible to extract that much money every year from the Irish economy without provoking a nationwide revolt.   

We have tried to argue our case both by appealing to Europe's sense of fairness and their sense of logic and also by ingratiating ourselves with the big powers in Europe. 

To say Kenny has been on a charm offensive is an understatement. He has been glad-handing and air kissing Merkel and the others as if his life depended on it. 

Our objective is to get the rest of Europe to agree that sovereign debt and banking debt must be separated.   If that is done and our banking debt becomes Europe's problem, where it rightly belongs, we have some hope of recovery.  If that doesn't happen we are doomed. 

At the end of June, as impatience grew here over the situation, a summit of European leaders seemed to offer us hope.  As the summit finished Kenny joyfully told us that what had been agreed amounted to a commitment to separate bank debt and to get Europe to carry the cost of refinancing banks.   It would take time to work out the details, we were told, but the principle had been established. 

Soon, however,  it became clear that Kenny was overselling what had been agreed.  The very next day, in fact, the German finance minister said that he believed that the cost of bank recapitalization should remain with the sovereign. Last month he was joined by the Dutch and Finnish ministers for finance, and all three said that there could be no retrospective deal on banking debt. 

To that can now be added Merkel's blunt statement last Friday along the same lines. "There will not be any retroactive direct recapitalization," she said.

Her attempt after the weekend to soften the blow was hardly convincing.  The agreed statement said that the Eurogroup would "examine the situation of the Irish financial sector with a view to further improving the sustainability of the well performing adjustment program."  It also said that "[we] recognize in this context, that Ireland is a special case, and that the Eurogroup will take that into account."

You don't have to be a diplomat to see that this reassurance could be interpreted in various ways.  It's very far from a clear statement that Ireland's sovereign and banking debt will be separated and that the ESM (the new rescue fund) will buy into the bank debt which our government now holds.

This is an absolutely make or break point for Ireland.  The last Irish government, bullied by Europe, pumped €64 billion into the Irish banks to enable them to repay their debts without going bust.     

As I pointed out in a recent column here, this means that almost all the money we’ve got from the bailout so far has not gone to keep our schools and hospitals running. Instead it has been used to allow our banks to repay their bondholders, in Germany and other countries. 

These bondholders loaned money to the Irish banks so they could get a share of the higher returns that were on offer here during the boom.  It was a gamble ... and they lost. 

But instead of being allowed to burn the bondholders, the Irish government was forced by the European Central Bank to pay all of them back in full, including junior and unguaranteed bondholders.  Either that or we were not getting the bailout. 

The mountain of banking debt was turned into sovereign debt owed by the Irish people.  In return we got to own the banks, but the cost was the gigantic €64 billion euro bank debt we are now carrying. 

The bondholders -- all of them --  should have been forced to take a hit, but this was ruled out by the ECB because they feared it would undermine confidence in European banks with consequences that would be disastrous for the EU. 

So the ordinary Irish taxpayer became the sucker in the game of protecting the European banking system, facing decades of high taxes and low state spending so the country can pay off the bank bondholders. 

Complex though it is, most people here now understand that this is unfair.  What should have happened is that all the bondholders should have been forced to share in the pain, and unguaranteed bondholders should have been burned. 

Anglo Irish and at least one other rogue bank should have been allowed to collapse altogether, with nobody except small depositors getting their money back.   (Anglo alone is responsible for half of the bank debt we owe.)   

The ECB, instead of forcing us to turn the bank debt into sovereign debt, should have been facing up to its own responsibility for what happened during the boom here.   The ECB is supposed to regulate banking across Europe, but it allowed the Irish banks to run wild during the boom and the European banks to fund the madness.  That failure must carry consequences. 

When you add to that the fact that €100 billion of Greek debt was subsequently written down and bondholders were burned, and also that other European countries which have since got into trouble like Italy, Portugal and particularly Spain are all being treated differently than Ireland was, it becomes clear why people here are so angry. The automatic loading of banking debt on to sovereign debt in the case of Spain, for example, is not being tolerated by that country.   

So far Merkel, the ECB and the financial hardliners in Europe are taking the view that in the case of Ireland, what was done is done and there's no going back.  The way we were forced to "socialize" our banking debt mountain may make us "unique" and a "special case," but there is no explicit undertaking yet by Merkel and the others to reverse the situation. 

A partial fix has been hinted at, but even that is uncertain.   Talk is cheap and that's all we've got so far. 

The bottom line on all this is that the €64 billion in bank debt we are being forced to carry (and a lot of the bondholders have already been paid in full) is money that should never have been paid back at all.   It certainly should not have been loaded on to ordinary Irish taxpayers.

The ECB failed to regulate, the bondholders took a gamble in the Irish market, the ordinary Irish taxpayers had little or nothing to do with what happened.   They should never have been forced to take responsibility for the debts of Irish banks and for the €64 billion that has been and is being paid back to bondholders. 

If the ECB wanted to give the billions back to international investors who had lost it in Irish banks that are now effectively bust then they should be doing it with their own money or money from the financial rescue funds in Europe.  If the aim was to prevent contagion of the European banking system, that's OK but it's the business of the ECB, not the Irish taxpayer. 

The bottom line is we never owed this money and we need it back.  Instead of air kissing Merkel, Kenny should be threatening her with an Irish divorce from Europe.

The Time of Enda Kenny’s life - Superman act does hide the fact that Ireland’s a long way from a “comeback”

Taoiseach Enda Kenny on the cover of Time Magazine

It was hard to know whether to laugh or cry here last week when we saw Taoiseach (Prime Minister) Enda Kenny adorning the cover of Time magazine, doing his steely-eyed pose into the camera.  “The Celtic Comeback,” the cover headline said. 

You will not have seen it on the newsstands over there since it was the cover of the European edition only.  Be thankful for small mercies. 

And spare a thought for Time readers all over Europe who were confronted with the disturbing sight of Enda doing his Superman act. I'm prepared to bet that most of them hadn't a clue who was he was, which must have been a bit perplexing since Time covers personalities who are usually familiar faces. 

Even so, people across Europe must have been intrigued by this strange man's power stare. This is what Enda does, of course. He may not use as much make-up as Bertie Ahern did, but he's just as concerned about image.  

A bit like George W. Bush, he talks in short sentences and simple language and he's slightly aggressive in his delivery, using a lot of hand chops for emphasis.  Under that improbably blond head of hair, he's very stern (to show he's serious), but with the occasional twinkle in the eye (to show he's human).   And he is relentlessly positive.  

Ireland will never default on its debts, Ireland will do whatever is necessary to get back on track, he repeats.  Lately he's started saying that Ireland is turning the corner.

He says these things with so much conviction he's probably starting to believe them himself.   The trouble is very few people here go along with him. 

They have seen through the empty positivity because they live in the real world, not in Kenny’s parallel universe. 

But whoever wrote the “The Celtic Comeback” headline appears to have bought Kenny’s line.  To be fair to the European editor of Time, Catherine Mayer, who wrote the cover story, her account was a lot more nuanced and qualified that the headline suggests.   (Even though Enda did not make the cover in the U.S., Mayer's story was carried inside the US edition so you can read it yourself).

So as someone who wrote front page headlines for newspapers for years, let me offer an alternative.   A more accurate headline would have been “The Celtic Con Job.” 

Because that is what we are faced with here, a financial con job that has been imposed on Ireland by Europe at enormous cost to the ordinary citizens here.

It's called a bailout, but in reality it's a way of paying back all the (mainly foreign) bondholders who gambled on the Irish property boom and making the Irish taxpayer pick up the tab. 

And who is the chief enforcer of this con job on Ireland?  It's the Comeback Kid himself, Enda Kenny.  

The Time magazine article does quote Kenny saying that he wants a better deal from  Europe on our debt.  We may get one eventually. 

But in the meantime he continues to work this deeply unfair bailout agreement which is depressing the Irish economy, causing record emigration and making life tough for ordinary people here.   

The heroic image of Enda on the cover of Time and the headline suggests that we are on the road to recovery and that the Irish economic crisis will be over before too long.  Nothing could be further from the truth.  The truth is that we are not even halfway through this crisis and it's a toss up which way it goes from here.  

Yes, it is true that because of the perception that we are coping with austerity, the yield on  Irish bonds has come down and we may be able to get back into the money markets at some point.  But the scale of the debt problem facing us is so great that we don't have a hope of keeping up with repayments.  And where will our bond yields go then?  

Read more news on Irish politics and government here.

There are two elements to the problem we face. The first is the €68 billion EU/IMF bailout we got, which is a millstone around the neck of the country.  

As you know, the Irish state guaranteed all Irish bank debt when the crisis erupted at the end of 2008, and so far the amount of money the Irish government has pumped into the banks to make good on this promise is around €64 billion.  

So almost all of the money we got under the bailout has been used to enable the Irish banks to pay off their bondholders. These bondholders took a risk lending money to the Irish banks because they wanted a slice of the high returns that were available during the boom here. 

They took a chance and it did not pay off. But even so, they are getting all their money back.

The joke is that many of the original bondholders sold on at prices discounted up to 50 percent, so the new holders of the bonds are doubling their money when the bonds mature and the Irish banks pay up the face value in full. 

So in effect what has happened is that the bailout money was given to the Irish government, who gave it to the Irish banks, who gave it to the bondholders.

At the end of this merry-go-round, the Irish taxpayer/state owes €68 billion in bailout repayments to the EU/IMF.

And these repayments are now part of the annual budget here, eating up a huge chunk of our tax revenues and making it much harder to balance the budget, even with big cuts in state spending. 

The Irish taxpayer is being forced to pay the gambling debts in Ireland of the international money markets.

Kenny was not taoiseach when the disastrous state guarantee was given to our banks or when the bailout was imposed on us after the state went bust as a consequence.  But instead of refusing to be part of this unjust system, he has gone along with it since he came into power.   

It is unjust because the bondholders, including senior bondholders, should have been forced to take a hit.  This was ruled out at the time by Europe because they feared it would seriously undermine confidence in European banks.  

So the EU turned a European banking problem into a gigantic problem for the ordinary Irish taxpayer who had nothing to do with the boom here.   It's an impossible burden for Ireland to carry. 

Even hiking taxes sky high and cutting state spending to the bone is not going to be nearly enough to allow us to pay back all we "owe."  The figures don't add up.  We either get a large amount of debt forgiveness (and it's not really our debt anyway) or Ireland will collapse again.  

So to suggest that we are now experiencing The Celtic Comeback is ridiculous. 

The humiliating part of all this is that our plea to have our banking debt separated from our sovereign debt and to have Europe deal with our banking debt, was turned down flat.  It was impossible, we were told. 

Yet now that a major country like Spain is asking for the same thing, it is suddenly possible after all.   We are now being told by Europe that the new arrangements don't apply to our "legacy" problem.  But that is so ridiculous it is unlikely to be sustained. 

What is clear is that, despite the impression given by the Time cover, Ireland is not showing the rest of Europe how to stage a comeback.  Instead we are trailing on Spanish coattails.

Apart from bank debt, the other part of our problem is the massive budget deficit that we now have following the collapse of tax revenue when the boom became a bust.   The Irish state is spending far more than we can afford.  

Instead of implementing a bold adjustment plan, Kenny has been fiddling while Dublin burns, afraid to take on the vested interests and the unions. 

He has failed to cut waste out of the system, to cut the pay and pensions of state workers in line with what has happened in the private sector, to reduce the hugely expensive government and NGO morass that eats up state revenue.  Most of the cutbacks so far have been aimed at the poor and powerless because they can't fight back. 

Despite the image of the strongman on the Time cover, Kenny's performance has been extremely weak.   The magazine piece includes a few quotes from Mario Rosenstock, a brilliant satirist and mimic who makes his living sending-up our top politicians. 

He got it exactly right when he told Time that Enda was a bit like Chauncey Gardiner, the Peter Sellers character in the movie Being There.  The movie is about a simple gardener in Washington who is mistaken for a great seer and whose simple pronouncements on the seasons and growing plants are interpreted by the president as allegorical insights into the state of the economy.  

With his Chauncey-like observations, Enda appears to have beguiled a lot of people outside Ireland that all will be well in the Irish garden.  But the reality is very different. The truth is we're a long way from any kind of Celtic Comeback.

A lot more action needed by Fine Gael/Labour coalition to save Ireland from economic ruin

Eamon Gilmore and Enda Kenny (Eamonn Farrell / Photocall Ireland)

There was a huge sense of relief when the Fine Gael/Labor coalition took over the government here after the last election, nearly two years ago now.  

The last government had led us into an economic catastrophe, presiding over a bubble that saw our banks almost wiped out, our state finances bankrupted and our modern nation forced to accept a bailout from the IMF, like some banana republic.  

Ever since, our economy has been sliding into a steep decline, with unemployment now over 14 percent and mass emigration back again. 

So there was enormous relief that Fianna Fail was out.  After so many years in power it had become lazy, incompetent, compromised, and occasionally corrupt.

That sense of relief at the start of last year was mixed with seething anger at what Fianna Fail had done to the country.  Which explains why Fianna Fail was decimated in the election and the two main opposition parties, Fine Gael and Labor, got a massive majority to form a new government. 

Coupled with the anger and relief felt by the electorate, however, was one other very strong feeling, a sense of expectation.   There was a powerful expectation in the air that this time things would be different. 

Of course we understood that because of the economic mess we were in, it was not going to be easy.   We knew there would have to be huge cutbacks.  There was no other way.

But at least the pain would be more bearable because now decisions would be taken on a rational basis and the burden would be shared by all.  The government would be open and honest about the challenges we faced and would offer real leadership and take tough decisions. 

There would be no more golden circles who made loads of money and paid little or no tax.  The poisonous nexus between politics and business would be excised.  

There would be no more waste of public money on a massive scale, lining the pockets of those who were connected.  There would be no more parish pump politics where politicians looked after their own areas and ignored what was best for the country as a whole. 

That was the expectation.  It was to be a complete break with the past. 

We were to set out on a new path of integrity and honesty and, despite the enormous difficulties we faced, that would see us through to a renewed prosperity some time in the future.  

Ah yes, that was the hope and expectation.   Sadly, however, our hopes have been dashed. 

Over the past year and a half our expectations have been revealed as naivety.   The new administration is almost as bad as the last.     

With each day that passes we see more incompetence, more cowardice in the face of our problems, more failure to take hard decisions, more parish pump priming, more abuse of power for naked self interest.  

As my old French teacher used to say, Plus ca change, plus c'est la meme chose.

A wise old political observer I talked to last weekend asked, “Well, what did you expect?  They've been out of power for years. Enda's been waiting 30 years to be taoiseach (prime minister).  This is their chance to indulge themselves, to preen in front of the cameras, to enjoy the spoils.  Can you really blame them?”

Perhaps not, because Enda Kenny and his boys have been waiting such a long time.  But it's deeply disappointing.  

At least when Fianna Fail was splashing out, it looked like the country could afford it.  Now Fine Gael and Labor ministers are attempting to behave in the same way even though the country is broke. 

The hubris and downright stupidity were visible right from the start, with Kenny insisting that Ireland would never default on any of its debts and that even junior bond holders would be paid back.  

This laughable stance was taken by Kenny as though it was a heroic, principled position.  The truth, which became clear as time went on, was that we had been locked into a penal and inequitable debt repayment regime by the European Central Bank to protect German and French banks and bondholders. 

We should have rebelled. Instead Enda continued to honor the bailout program that had shifted the mountain of bank debt on to the backs of the ordinary Irish taxpayers.   

For the Tanaiste (deputy prime minister) Eamon Gilmore it was to be Labor's way, not Frankfurt's way.  That was his ringing election campaign call to arms. 

We were not going to accept the IMF-EU straightjacket.  We were going to renegotiate the bank debt and get a better bailout deal.

After the election he did a rapid about turn and continued the previous policy of accepting the bank debt mountain as a sovereign liability.  Even for a politician, it was a jaw-dropping reversal.  As a result it is now hard to take what Gilmore says on anything seriously.  

From what we now know, it seems clear that the infamous state guarantee for our banks given by Fianna Fail at the end of 2008 was done without fully appreciating the consequences.  The then Taoiseach Brian Cowen and the then Minister for Finance Brian Lenihan were completely out of their depth and working off inadequate information. 

They seemed to be unaware that there was a real and substantial risk that what they were doing -- turning bank debt into sovereign debt -- could bankrupt the state, which is exactly what happened subsequently. 

Ignorance is no defense. But at least we can say for the senior Fianna Fail people involved, they didn't know what they were doing.  They were engulfed by the crisis and panicked by the thought that the Irish banks might collapse. 

So they did what was necessary, as they saw it.  They also bought into the European Central Bank view that no lenders could be burned.  

And we set about paying back all the money our banks had borrowed from German and French banks, bondholders and other investors.   As bank losses multiplied to unimagined levels the money involved was huge.

Two years later, when the Irish state ran out of money and we were forced into the bailout,  Fianna Fail again accepted the EU diktat that writing down Irish debt and burning bondholders was out of the question because it might precipitate a crisis of confidence in banking across Europe.  

By then, of course, they had us over a barrel.  We either agreed to the terms or we were not getting the bailout money.

So we agreed and continued to pay back the mountain of bank debt as it fell due, even though we had now woken up to how unfair this was to the Irish taxpayer who had been left carrying the can. 

This was the background against which the Fine Gael and Labor government took power.  By then it was clear that Ireland had been given a very raw deal and that unless we could get it changed it was going to mean huge cutbacks in state spending here, coupled with higher taxes, for years to come. 

The attempts by the new government to get a new deal on the bailout have been pitiful.   Instead both Kenny and Gilmore have been strutting around at home, in Europe and elsewhere, making portentous speeches.  If dinner jackets and speeches could fix what is wrong, we'd be in great shape. 

An example of this disconnection was Gilmore addressing the UN last week on
Syria. 

Doesn't he know the extent of the financial crisis in Ireland? 

While he was in New York pontificating, one of his Labor junior ministers was resigning at home in a bitter row about health services and how spending was being handled.

The government's main policy is to continue the regime of severe cutbacks in state spending.  That is probably unavoidable, even if we did get a better deal on the bailout. 

But the question is HOW the cutbacks are made and how equally the burden is shared.  

So far the government's attempts to show courage and leadership have been pathetic.   Cuts are made in easy targets, usually affecting the mass of ordinary people who don't have lobby groups to protect them. There is a whole section of Irish society -- the upper tier of professionals, administrators, business heads, senior civil servants and so on, including politicians and their advisors -- which has been largely unaffected by the financial crisis here.  They are protected by their influence.  

There may have been some small adjustment in their pay or pensions, but proportionately the effect is negligible in comparison to the pain felt by ordinary people on welfare or lower wages.  

Fine Gael is presiding over this shameful situation because it does not have the courage to tackle the powerful vested interests.  And Labor is almost as bad. 

One of the big tests facing the new government was tackling the pay and pensions of the state sector workers. Even though the state is broke, reductions in pay and pensions for state workers have been very slight. 

The reason is that the state workforce is the last bastion of power for the unions here, who are a major influence on Labor Party policy.  Labor should have been able to do something about the enormous pay and pensions bill in the state sector but they have failed abysmally.  Instead they reduce services and introduce extra charges for ordinary people.

The non-performance so far of the government on the crisis facing us is producing a serious credibility gap for Kenny and his ministers. Kenny's forceful, defiantly positive sound bites are sounding increasingly empty. 

Action speaks louder than words.  And so far there has been no action worth talking about. 

Ireland is no country for young men or women anymore -- Sky high taxes, lower incomes means only bad news for the young

Karl Miller, Olwen Sheedy, Sam Hopkins and Sinead Donolon have all left,
thought about leaving or are leaving Ireland to find work.(Credit: CNN)

One of the worst aspects of the financial crisis in Ireland is the way it has impacted on young people disproportionately.

By young people, I mean not just those still in college, but those in their twenties and thirties, and even forties.

These include the young couples who bought houses at the top of the boom and are now struggling to pay their sky high mortgages as their income shrivels. When they bought their dream home their pay seemed to be increasing every year; now it's shrinking, all the bonuses and overtime payments have vanished and money is getting tighter all the time.

And of course they can't sell because they're deep in negative equity, with the house worth half what they paid for it, or even less. Then there are those couples in even deeper trouble, the houses in which one or even both partners have lost their job. A recent report predicted that by this time next year, around one-fifth of all mortgages in Ireland will either be restructured or in arrears.

It's not just mortgages that are causing problems either. As the government struggles to cut spending, a lot of free stuff now has to be paid for, in areas like health and education. Meanwhile, the cost of things that are essentials, like gas, electricity, oil, transport and even food have all increased. Petrol prices have increased sharply and for many families a car is an essential, not a luxury, with kids who have to be ferried to school and jobs to get to.

And the burden of taxes is getting heavier all the time. It's not just the income tax at 41 percent on anything over $40,000 a single person earns, but on top of that you pay four percent (and your employer pays 4.5 percent) in pay related social insurance (PRSI), and then there's the new universal social charge (USC) which is seven percent.

So including the employer's PRSI, the effective tax rate on anything a single person here earns over $40,000 is 56.5 percent, not the much quoted 41 percent.  For a married couple, the income at which the marginal rate kicks in is $49,800.

All told, the income tax burden here is already very heavy. And if you have to pay for child care -- unlike other EU countries it's not subsidized here -- it can be very difficult to make ends meet.

On top of all this, many younger people here have significant borrowings (when they bought their dream home they got the plasma screen and the designer kitchen and the nice car), and making those loan repayments is also getting harder.

In many cases, the extras are being sold off. Older people tend to have pre-boom savings and have already acquired and paid for the extras that make life comfortable.

The conjuring trick of taking "social" charges separately out of pay does not fool anyone here anymore -- it's time the government here started calling it all income tax, because that's what it is.

The irony is that many people don't make use of "social insurance" anyway. They don't want to endure long waiting lists in the public health system, and so they go private and pay for treatment.

A lot of them who lose their jobs emigrate so they don't take their welfare payments. And other things like "free" school education ends up costing money because sports and books and equipment all have to be funded by the young parents.

To say that money is tight for so many younger singles and couples here is an understatement.
A survey last April by the Irish League of Credit Unions showed that up to 47 percent of Irish adults have less than $130 to spend by the end of the month once all their essential bills are paid.

Most of them are younger people.Nearly two-thirds of those questioned said they have less to spend than they did last year.

The wave of unemployment here due to the financial crisis also affects younger people much more than the older generation (those in their forties and fifties and beyond).  This is not surprising, since the younger ones may be college leavers or young workers with limited experience, whereas the older ones will often be well established in jobs or professions.   The old rule of last in, first out, also seems to be in operation.

The result of this is that most of the 40,000 plus people now emigrating from here each year are younger people. And it's not just singles, but young couples often with young children as well.

So in all kinds of ways, younger people here are getting a raw deal despite the fact that the crisis was created by the older generation, not the younger generation. And they will go on paying for the mistakes that led to the financial collapse and the bailout for years to come.

Read more: 40,000 are leaving Ireland every year new figures show

It's obviously unfair, but nothing is being done about it (like, for example, a serious program of debt forgiveness to rescue those younger couples now drowning in mortgage debt and negative equity).

All of that is only half the story, however. Where this becomes really shameful is the way the older, established section of Irish society is doing everything it can to protect its privileged position at the expense of the younger generation, no matter the consequences.

A lot of lip service has been paid here to the necessity for burden sharing to get us through the crisis but when it gets down to it, it's I'm alright Jack, and you can look after yourself.

This is happening right across the economy here. In the private sector we have seen the arrival of so called "yellow pack" workers in many companies who get lower pay and poorer conditions and pension entitlements than existing workers doing the same jobs.  

School and college leavers are taken on for periods of "work experience" but never get paid.   There are the "internships" which are paid at low rates, and when it's time for the interns to get proper pay they are let go and a new lot of interns are brought in.

Add to that the growing tendency to offer short term contracts of a year or two rather than permanent jobs and it all adds up to exploitation.

A lot of this has happened while older workers in these companies have stood back and done nothing as long as their positions, pay, and pensions have been protected.   The same thing is happening to a far greater extent in the public service, where state workers and their unions have turned their backs on new entrants.

In this column recently we mentioned the case of teachers. Recent figures show that new school teachers here are now being paid $15,000 less than new teachers who started work in 2010 (starting salary of $36,000, down from $50,000).

They will be doing exactly the same work as their colleagues but will be paid far less. In fact they are getting less than the pensions being paid to older teachers who have retired in the past few years.  Even a teacher who retires at 60 instead of 65 gets more in pension than a new teacher now joining our school system gets in pay.  

Clearly this is deeply unfair. But it's not just in teaching that this kind of stuff is going on -- it's happening across the state workforce.

And to their shame, the unions in the state sector have been a key player in this rotten compromise. Younger entrants in all areas of state services are being given lower pay and poorer conditions in a trade off that allows the older workers (all unions members of long standing) to keep their privileged pay and pensions.

Pay and pensions in the state sector are protected under the Croke Park Agreement, the now infamous deal signed by the last government in 2010 and running up to 2014 under which the state sector unions guaranteed that there would be no strikes. Under the agreement there can be no pay cuts, other than the very limited reductions already agreed at that time by the unions.

But the crucial thing about the Croke Park Agreement is that it applied only to the state workforce at that time. It did not cover new entrants into the state services.

So in return for guarantees on their own pay and pensions, the existing state workforce abandoned the new generation of state workers who would be coming in. In effect this meant that the unions had abandoned the basic principle of equal pay for equal work.

The door had been opened to a two tier system, with those on the good deals that went with the boom hanging on to what they had at the expense of the newcomers.

The Labour Party – which is part of the coalition government -- has lost all credibility on the issue of reform in the state services.  The (Labour) Minister for Public Expenditure and Reform Brendan Howlin became a laughing stock here over the past week because of his failure to implement any reform that affects the existing workforce in the state services as opposed to the sacrificial lambs of the new entrants.

He promised major reform of the system of "allowances" given to state workers -- some deserved, most simply idiotic -- which gives them extra payments to hike up their incomes for doing extra chores (like filing, or using technology) that most people in the private sector would consider a normal part of the job.

These allowances are being scrapped for new entrants, but of the 1,100 allowances in the system which benefit the older generation of state workers, Howlin managed after his review to scrap just one.

Why did this happen? Because the unions, on behalf of the established state workforce, told him to back off.

What we have, we hold. And if the new entrants don't do as well, don't blame us, they said. We're not joining a race to the bottom.

So overall, the pain of cutting back in the Irish economy is falling mainly on younger workers and their families. It's true in the private sector and even more so in the state sector.

It's no country for young men, or young women either.

We’re too good for our own good - Ireland’s image in Europe isn’t doing us any favors

Irish Finance Minister Michael Noonan (right) talks to euro group president Jean-Claude Juncker in Cyprus

Ireland's goody two shoes image in Europe is not doing us any good.  

Being the best boy in the austerity class is not getting us anywhere. That much was clear at the end of last week when our Minister for Finance Michael Noonan returned from yet another meeting with the finance ministers of Europe with his hands -- and his pockets -- empty. 

He got lots of praise, of course.  One paper here suggested that the top of his bald head must be sore from all the patronizing pats he was getting from the financial big wheels in Europe. 

Ireland again was held up at the meeting as a lesson for the other impoverished European countries in how to stick to an austerity program. Our financial betters again said we are the perfect example of a mature country quietly doing what it takes to restore budgetary discipline, cutting spending and hiking taxes.  And we're doing it without all the unpleasant smoke and riots that can be seen on the streets in Greece, and even without any of the tiresome posturing and whinging and mass marches that have been going on in Spain or Portugal or Italy.

We're the best, we were told.  We had praise heaped on us again. 

And that's fine.  But as my granny used to say, all the praise in the world won't put butter on your bread.   

We're only a couple of months away from what will probably be the most difficult budget ever faced by the Irish people.   We desperately needed a deal on our debt to cut us some slack and give people here some hope.  

But in spite of weeks of hints and half promises from Europe, we got nothing.  

Even with a deal, a very severe budget will still be necessary because we're at least a few years away from getting spending back in line with revenue.   But a deal on the impossible burden of debt that is crushing Ireland would have shown people here that there is light at the end of this very dark tunnel.  

Instead, all we are looking at this week is blackness.

What seems to be holding everything up is the attitude of Spain, which went through a property boom and bust like us and is now just as broke as we are.  

The Spanish are opposing a financial  rescue package which would turn the enormous losses in their banks into sovereign debt.   And they seem to be winning the battle. 

This is exactly the issue that has sunk Ireland.  What happened here is that our banks went belly-up a few years ago when the property market crashed, owing tens of billions to investors and bondholders. 

The money markets stopped lending to us and the EU-IMF bailout was brought in to rescue us from financial and social collapse.  

The billions we got came with a heavy interest rate and with strings attached, mainly the order from the European Central Bank that no banks would be allowed to fail, no bank debts  would be written down and no bondholders would be burned.  

Instead of putting the money directly into our banks, the EU-IMF bailout loaned the billions to the Irish state so that it could recapitalize the Irish banks, and in turn the banks would be able to repay the billions they owed to German and French banks and to other bondholders. 

Not realizing the scale of what we were facing, the Irish government had already given a blanket state guarantee on all our bank debt.   The EU-IMF bailout conditions reinforced that guarantee.   The effect  was to turn tens of billions of private banking debt into sovereign debt (debt owed by the Irish state).   

Because tax revenue here had collapsed after the property crash, our budget deficits were huge.  The Irish state was bankrupt, and on top of that the Irish taxpayer was left carrying the can for the enormous bank losses.  

The German and French banks and bondholders who had lent billions to the Irish banks to fuel the property boom here and get a slice of the action for themselves were home free.  The European Central Bank which was supposed to be regulating banking in Europe and had failed to spot the bubble in Ireland was off the hook.

They all got their money back, even though the Irish banks were bust.  The only people left hanging were the Irish taxpayers who were now lumbered with the total cost of the mess.

The cost of bailing out the Irish banks was around €64 billion, a gigantic sum for a country the size of Ireland.  The tens of billions of private bank debt which were shifted on to the Irish taxpayer is close to half of our total debt mountain, the rest being the result of our accumulated budget deficits.  

Without that extra load to carry, the Irish state might have been able to cut spending and sort out our financial crisis without having to take a bailout.  But we were forced into taking the bailout and into agreeing that the Irish state would pay back all the bank debt.   

As I have said before here, we were stitched up.  

The reason given by Europe at the time was that any bank collapse or any burning of bondholders would shatter confidence in the markets and have a domino effect across the other weak countries.  

But there's been a lot of water under the bridges in Greece, Portugal, Spain and Italy since then.  The increasingly desperate attempts in Europe to stop the spreading financial contagion led to the realization that loading up these countries with sovereign debt on top of accumulated budget debt was likely to make the situation worse, not better. 

So we have the new ESM bailout fund, due to kick in next month, which seems to be willing to muddy the water about exactly what is sovereign debt.  And we have the ECB President Mario Draghi twisting German arms to get agreement that the bank can buy bonds of countries in trouble without any limits and at much lower rates that the markets demand.

So when Spain gets into the same kind of trouble Ireland is in, a different set of rules is being applied.

The reason is that if Spain or Italy were to collapse, the euro would be finished and the European Union would be in serious trouble. 

At the EU finance ministers meeting last week, all the concentration was on the bigger problem of Spain rather than on finding a way of lessening the burden on a little country like Ireland.  So we
were ignored, apart from the few pats on Michael's shiny head.   

In a way, our good behavior in meeting all the budget targets set by the EU-IMF has worked against us.  We have also managed to get back in the bond markets ahead of schedule, even if it is on a very limited basis, and that has allowed the powers that be in Europe to think that we are doing okay and don't need to be given a break on our debt. 

Nothing could be further from the truth.  The crushing debt burden we have to service is taking billions out of here every year and will go on doing so way into the future, leaving state services cut to the bone and no money left for the investment we need to make to get our half a million unemployed back to work.

Most economists here agree that although we can muddle on for a few years, there can be no long term solution to our financial crisis without debt forgiveness or sharing. 

Apart from that, of course, there is the moral question.  Why should Irish taxpayers who played no part in the property bubble have to pay back the money lost by German and French banks and bondholders who gambled on the Irish property boom by lending billions to our banks?   They lost the bet but they still get all their money back?

Meanwhile, the Irish taxpayer is being fleeced.  Where is the justice or fairness in that? 

It's not that the EU has anything in particular against Ireland.  It's just that we were unlucky enough to be the first EU country to hit the skids, and we have been forgotten in the chaos that has ensued. 

The EU, for all its talk, is hopeless at taking action.  It puts every decision off until a crisis looms and even then it is slow. 

In the EU's view, Ireland does not need immediate fire engine intervention, so it can be left to one side for the moment while more pressing matters are dealt with. That may sound simple, but it's true. 

The only way out of this is to ditch our “best boy in the class” image and become awkward and difficult like Greece or Spain.  It's not in our nature to complain, of course. (That's what 800 years of oppression does to you!)

But the next time Noonan gets a pat on the head instead of debt relief, we should all be out on the streets. 

You don't think we're up to it?  Just wait a couple of months.  The upcoming budget in December could be the turning point.