Drinking and the death of rural Ireland - the demise of pubs, the drink driving permit and isolation

Small rural pubs like this one in Templemore, 
Co. Tipperary are closing at a rapid pace

Don't you just love the way that story about Kerry County Councilor Danny Healy Rae's proposal on drink driving has gone global?

The bould Danny outraged all the politically correct nanny staters in Ireland last week by suggesting that customers in small rural pubs should be allowed to drive home slowly along quiet country roads after having a couple of pints.  

But it wasn't just the horror at what he was proposing that got to the PC brigade.   What made it even worse for the High and Mighty here was the international coverage the story got, since it fitted all the stereotypes about the Irish and booze, and it had the added bonus of an eccentric looking Kerryman at its center.

The sophisticates in Dublin were rigid with embarrassment.  Oh, the shame of it!  We were being made look like idiots -- sorry, that should be eejits -- before the entire world!

Papers, TV networks, the Huffington Post and other sites across the Europe, the U.S., Australia and further afield ran the story, with varying degrees of accuracy and extra chuckles added in.  

Most of them were in the Begorrah, Hic, Ye Won't Believe This! vein.  The headlines varied from the one on the U.S. Gawker site, "Lawmakers in Ireland to allow 'moderate' drunk-driving" (which is completely inaccurate) to the misleading one in the Toronto Star, "Irish county passes motion to let certain rural drivers drive while legally drunk" (they wouldn't be if the proposed legal change was made) to the follow-up one in Australia, "Irish county councilor insists drink-driving fight isn't over yet" (which managed to get the word fight in as well drink).  Seemingly the story even ran in China.  

"I know where I'm moving to," was a typical comment by readers on sites and blogs around the world.   For a day or two, the wilds of remote Kerry on the south west tip of Ireland seemed to be the center of the worldwide web.  

Here in Ireland, of course, we did not see the funny side.  We rarely do. We're remarkably thin-skinned when it comes to appreciating jokes, send-ups and humorous put-downs, especially if the words drink and Irish are mentioned in the same sentence.   

So the great and the good and the Holier Than Thou here all lined up to publicly ridicule and condemn Healy Rae for his "outrageous,” "irresponsible,"  "backward" suggestion.   The vitriol poured on him was quite extraordinary.

And no tactics -- including some papers getting comment from the mothers of youngsters who had been killed in road accidents -- were too cheap for the PC brigade to unload on him.

What none of them mentioned, however, was that he had a point. The pubs all over rural Ireland are dying.

The old men with the peaked caps who used to drive in a few miles from their farms out in the bogs for a pint or two in the evenings can't do it anymore because of our drink driving laws.  As a result many are suffering from isolation and depression.

The little country pubs are closing -- dozens of them every year -- and a way of life is being lost, a way of socializing which has been at the heart of rural Ireland for generations.

The effect of this has been devastating in the more remote and sparsely populated parts of rural Ireland.   Unable to go to the pub in the evenings, because they are afraid of being caught driving home again after a few drinks and losing their driving license as a result, they don't go out.

If you live a few miles from a village down a bog road, losing your license is not something you want to happen.   How can you get to the shops? To Mass? To the doctor? So rather than risk it, you stay at home.

Long before last week's controversy we were aware of the problems that this is causing, particularly for older people in rural areas.  The lack of social contact can lead to depression and worse.  So there's clearly a problem there.  

So far the PC brigade (mostly in Dublin) have said that the way to deal with this is taxi-sharing, local transport, pub owners bringing customers home in a minivan, etc.

This sounds sensible, but none of it works.  Public transport in rural areas is almost non-existent, and sharing taxis and minivans ignores the reality that people may want to go home at different times and that they may live many miles in opposite directions from the pub.

It's been tried and it rarely works on a sustainable basis.  Also many of the people we are talking about cannot afford to pay for taxis home.  They can just about afford the price of a couple of drinks.

The motion which Healy Rae introduced at the council and got passed on Monday of last week was actually a reasonable compromise.   It called for legislation to be introduced -- and it has to be national, not local legislation -- which would allow rural Gardai (police) to issue permits to allow rural dwellers to drive from their local pub "after having two or three drinks on little used roads driving on very low speeds."

Clearly when such legislation would be framed other qualifiers could be added in, like a high minimum age (over 40?), a clean driving record, a small engine car, a low maximum speed limit, a maximum distance from the driver's home and so on.

Healy Rae suggested the alcohol limit should be equivalent to two or three drinks (" a maximum of three.")   That could be kept at two, although clearly a lot depends on physical size and when the drinker last ate.  The present limit can equate to less than one pint for someone of average size who has eaten a small meal a couple of hours previously.

So Healy Rae's motion was not radical. It was a modest attempt to find a solution to a complex problem.   Or at least to start a discussion on how such a solution might be found.

The reality is that the kind of drinkers Healy Rae has in mind are not the problem.  The problem are the younger drivers who get out of their heads by downing a bottle of vodka and handful of pills and then get in their cars and go screaming down the road like a racing driver.  They're called boy racers, although a lot of them are in their twenties or thirties.

One of the mothers who was quoted in the media here this week condemning Healy Rae lost her son in a road accident and campaigns against drink driving.  But the young man who killed her son had consumed seven pints, six bottles of beer, five cans of beer, two vodkas, three shots and a line of cocaine before getting behind the wheel.

Of course everyone wants to keep someone like that off the road.   But there's a long way from that to the older, responsible, cautious driver carefully making his way slowly home after a couple of pints in his local pub.  

In case the Healy Rae line might gain some traction, all kinds of "experts" and politicians immediately flooded the media to put forward the conventional wisdom and insist there could be absolutely no change.  The idea was so stupid it wasn't worthy of intelligent discussion, they insisted.

A spokesman for Alcohol Action Ireland said that alcohol, even in small amounts, impairs driving ability.   Well, yes it does. But then so do lots of drugs we don't normally test for, like cocaine and marijuana, uppers and downers, ecstasy, and numerous prescription drugs like anti-depressants, blood thinners and so on.  Even normal cold and cough medicines can have an effect in high doses.

Then there are people with various medical conditions (diabetes, respiratory and heart problems and so on) whose driving can be affected either by their problems or by the drugs they have to take.   I know one elderly woman who has a bad case of "restless leg" and regularly kicks out to straighten her knee and relieve the tension when she is driving!  

The question is how much does alcohol in small amounts affect a person's ability to drive, and is it more than the effect of many other factors like the ones described above which are rarely considered.

I think we all know the answer to that one.

Small amounts of alcohol are no worse than small amounts of many other factors.  It's just that we have a thing about alcohol, to the point where it has become an obsession.

“Almost one in three crash deaths in Ireland is alcohol related. Even in small amounts, alcohol impairs driving ability - any amount of alcohol increases the risk of involvement in a fatal crash,” the Alcohol Action spokesman said.

Irrefutable evidence?  Hardly.  This is not evidence, it's propaganda.  

All the first sentence means is that in one-third of road deaths here, the driver(s) had some alcohol. We don't know how much.  It's possible that he or she had just one or two drinks.   Or maybe just one drink but also a handful of pills.   Or maybe they had a bottle or more of spirits and a load of other drinks as well.

We just don't know.   We don't know how much of a factor alcohol was in these deaths, although the implication being made is clear in the second sentence.  

The emotive line "any amount of alcohol increases the risk of involvement in a fatal crash" suggests that any drinking risks causing fatal car crashes and kills people.  Yes, a small amount does increase the risk but by how much?

More than lack of sleep and the risk of nodding off at the wheel?  More than getting hyped up by drinking too many cups of coffee or Red Bulls?  

This absolutist attitude to drink and driving ignores the truth staring us in the face.  What causes the death of people in most car crashes in Ireland (and probably everywhere else) is SPEED, not alcohol.

As Healy Rae says, if you have had a couple of pints and you drive slowly and carefully home along a quiet country road you know like the back of your hand, you are far less likely to kill someone than an alcohol free driver roaring down a main road at 90 miles an hour who may be on something.  

Healy Rae's motion, which calls for mature rural drivers to receive special permits that would allow very moderate drinking and driving, was passed by Kerry County Council by five votes to three.  Twelve councilors were absent from the chamber while another seven abstained from voting.  

Healy Rae, from a well known Kerry family of political mavericks, is himself a small bar owner in a rural area. There's no doubt he had one eye on his bar business and the other eye on increasing his vote when he put the motion to the council and got it through.  

There's also no doubt that many of those who were missing or abstained when the vote was taken did not want to be seen opposing the motion no matter what the big boys in Dublin think.  They know there's a lot of sympathy for this view at grassroots level.  Of course they also know that the chances of the national government agreeing to act on the Kerry Council motion and change the drink-drive law are nil.  

Country people know that an absolutist approach to social issues like this is unfair and disproportionate.  They know that the present regime is killing most of the small country pubs in Ireland -- hundreds have shut down in the last few years.  In the Healy Rae native village of Kilgarvan the village once had six pubs, now it has two.

The problem could be fixed, with a little common sense all round.  Unfortunately, given the power of the various PC groups in Ireland these days, it won't even be considered.

Meanwhile, the death of rural Ireland continues.

New Catholic Church leader in Ireland won’t change much - Eamon Martin’s take over from Sean Brady as Primate of Ireland

Monsignor Eamon Martin

Last week saw the beginning of the changing of the guard in the Irish Catholic Church.   Whether it will mean much of a change in attitude remains to be seen.

The jury will be out on this for a while, but the early signs are not good.

The new man at the top is to be Monsignor Eamon Martin, formerly of the Derry diocese, who was named last week as an assistant to the current head of the Catholic Church in Ireland, Cardinal Sean Brady.

Brady had requested last year that someone be appointed "to help him with the workload."  The reality, however, was that Brady's position had become completely untenable following the revelations in a BBC TV program last year about his handling of the case of the notorious Father Brendan Smyth back in 1975.

Smyth perpetrated the most appalling child abuse north and south of the border and also in the U.S. when he was sent over there.  He was an obsessional, predatory abuser over four decades from the 1950s to the 1990s  as he was shifted around from parish to parish and even from country to country.

Dozens, possibly hundreds, of children were abused by him. Eventually, he was jailed in the north, and subsequently in the south. His case was so controversial that it led to the fall of the Fianna Fail-Labor government here in the 1990s over the attorney general's handling of Smyth's extradition.

Having brought down a taoiseach (prime minister) back then, it's not that surprising that Smyth, who died in prison here in 1997, is now responsible for bringing down a cardinal as well.

Brady has been clinging on since last year, but he had lost credibility and his position became hopeless. His problem was that he had been involved in the church investigation into Smyth in 1975 after accusations of abuse had surfaced.

This investigation was conducted by Brady and two other priests for the local bishop in the area where Smyth had been operating. Brady, a canon lawyer, has always insisted that his function was simply as a note taker. He passed his report on to the bishop for action and little or nothing was done.

What the BBC revealed last year was that during the investigation one boy had given Brady a list of names of children who were being abused. Brady did not inform their parents.

The program also revealed that the boy remembers that Brady played an active role in the investigation, interrogating the children who had made complaints.  This was confirmed by one of the other priests, who has since left the priesthood. So Brady was not just a note taker.

The questions that were asked during the investigation -- with Brady playing an active role -- were outrageous.  The boy, who Smyth had got to masturbate him during regular visits to his home, was asked if he liked doing this. He was also asked what happened to his body during the sessions and whether he would have done this with another boy or man.

This questioning was not only inappropriate but irrelevant. The boy was only 13 or 14 at the time and so was not old enough to consent.

Apart from his active role in the questioning and his failure to involve the police or to follow through on his report to the bishop, the most damning revelation was that Brady, although he had a list of names of children Smyth had abused, did not contact their parents to tell them. This was unforgivable in the eyes of parents who saw the program, and from that moment on Brady was a lame duck cardinal.

Last year he attempted to explain his actions -- or lack of actions -- by saying that he did everything that was expected of him as a priest back in the 1970s.  But that only made matters worse, and since then he has had zero credibility.

Mind you, all this has not stopped Brady trying to conduct business as usual, with the Catholic Church here a few weeks back condemning "the culture of death" that was being promoted in the developing debate about the introduction of very limited abortion in Ireland.

The church has been adopting its usual stance as the moral guide for the nation, urging legislators not to "exploit" the death of the Indian woman who died in a hospital in Galway last year from septicemia after being refused an abortion during a prolonged miscarriage.

But, of course, it is hard to occupy the high moral ground when your leader has no credibility.  So Brady, 73, has to go, and it is clear now that Rome wants him gone sooner rather than later.

Last week's appointment of  Martin as his "assistant" is supposed to carry Brady up to his planned retirement in 2015, but don't be surprised if he is gone in a few months.

So what of the new man?  Martin's new title is Coadjutor Archbishop of Armagh (Brady is Archbishop of Armagh and Primate of All Ireland) and at 52 is a virtual teenager in church terms.

When he ascends to the top job he will be one of the youngest men ever to lead the Catholic Church in Ireland. In that sense he is being seen as a clean break with the previous, discredited generation.  He is also an engaging communicator with a relaxed style.

But behind the genial exterior there is a steely conservatism that was immediately on view when the announcement of his appointment was made last week after a Mass in Armagh.   Asked about the current abortion debate, he firmly responded that it was the church's duty to protect life from the moment of conception to the time of natural death.

Flanked on one side by Brady and on the other by the Papal Nuncio, Martin's remarks made it very obvious that although the generations might be changing, there was no change in the message.

So don't expect any discussion of grey areas.   It will be absolutes as usual.   The church will lay down the law. The faithful (what's left of them) will follow.

Afterwards there was a more relaxed gathering in a hall in which the new man answered questions from the media, surrounded by admiring priests, nuns and some children.

There was one particularly revealing moment. In answer to some question, Martin said that he had grown up as one of 12 children in an ordinary family in Derry. There was a momentary pause and total silence.

Then Brady beamed an ecstatic smile and led the applause as all the clerics in the hall clapped and smiled happily. Twelve children!  Isn't that wonderful!

Well, no it's not. It's more than likely the result of the church's ban on contraception.

But then this has always been a very Irish attitude to sex and family size, one encouraged by the Catholic Church. Sex outside marriage is wrong. But once inside marriage, sex is acceptable, as long as it is natural and no contraception is used.

The "big families" that were so common in Ireland until recently were something to be celebrated, even if the family lived on a small farm producing barely enough income for a couple to survive on, or even if the parents lived in a small council house in a town or city and earned barely enough to feed and clothe themselves.   Parental responsibility did not come into it.

It was the state's duty to provide housing, schooling, health care, unemployment benefit if the parents were out of work, and so on.  So there was no reason to limit family size.   In fact the reverse was the case, because the more kids you had, the more benefits you got.

Martin smiled in a slightly embarrassed way as the applause rolled around him. Unspoken in the air hung the idea that the clerics were thinking.   Oh, these Catholic fathers!   They could be rogues! You couldn't be up to them!

This kind of traditional humor is built on attitudes that have bedeviled us here for generations and are still alive and well in the Catholic Church, particularly among traditional Catholics.

It's no accident that the chosen new leader of the Catholic Church in Ireland recently has taken a prominent role in asserting the church's pro-life message.   Last month Martin was at one of the pro-life vigils in Dublin, and in Derry he is coordinating a 40-day campaign of prayer and activism within his diocese to oppose abortion on either side of the border.  Under any circumstances.

Behind the almost casual style he presents, there is a formidable organizer at work. Martin has a reputation as a church administrator of great ability.   His nickname among clerics is “The Machine” because he works so hard and is so thorough about everything he does.

He is young, conservative and tough, even if it's hidden behind an informal, engaging personality.   It's church business as usual, then.

Will the Newtown massacre finally force American to tackle its control of guns?

The closest that the vast majority of Irish can get to purchasing 
a gun exists only in replica form, such as the fake 
guns pictured inside a Dublin shop last year.

What is wrong with Americans, my daughter asked, her voice shaking with anger and frustration. She's 21, a third year college student, and she has a low tolerance for bull.

Like everyone else in Ireland, she was both upset and appalled by the slaughter of the innocents in the school near Newtown, Connecticut.  But she was outraged as well, outraged by the failure of Americans to do anything meaningful about the situation that allows this kind of tragedy to happen again and again.  

Why are they surprised that it's happened again?  Are they all stupid?  Don't they realize that gun control is the only way to stop it?   She demanded answers.

Of course I didn't have any answers for her.

The gun situation in the U.S. is so bizarre to people in most other civilized countries that it is almost unbelievable.  Yet so many Americans think it is defensible, necessary, even admirable.

To people on this side of the Atlantic, the fact that ordinary people in the U.S. can possess not only semi-automatic handguns but fully automatic assault rifles is seen as not just highly dangerous, but preposterous.  It cannot be justified under any circumstances in a modern, democratic country.  Yet so many Americans still believe that it is acceptable.

And then they claim they are surprised and shocked when a tragedy like Sandy Hook occurs?  

My daughter and I sat together in Dublin on the day of the shooting watching the late night news from America, first CBS, then Fox News. Bill O'Reilly looked like he had been pole axed from behind.  

There was no explanation possible, he said. There was nothing that could be done.

It wasn't a gun control issue, he said, because controls would not stop evil.  This was evil and evil would find a way.

Other commentators talked about waiting for the full facts about this latest shooter.  Or about tightening up on regulations to stop guns getting into the hands of people who are mentally ill or criminal.  

But they all admitted that such moves might not have stopped Adam Lanza.  It has been suggested that he had social issues, that he may have been borderline autistic.  It was suggested by one or two people who knew him that he was unstable, or heading in that direction.  

But at what point on the instability scale does being a shy, isolated loner, or a nerd, or someone prone to occasional outbursts of anger, register in an official way on public records that would disqualify that person from getting a gun?  How obviously crazy do you have to be?

And suppose you got your assault rifle a year or two before you became visibly unstable? What is there in the present control system in the U.S. to deal with that situation?

All of this, of course, is irrelevant in the case of Lanza because the guns did not belong to him, but to his mother.  This raises the question of what the authorities should be doing to prevent cases like this.

Does it mean that background checks and suitability checks would have to be done not just on someone who wants to buy a gun but on everyone in their family or even everyone who has access to their home?

The absurdity of this exposes the impossibility of making the present system of preventing gun massacres in the U.S. work.  There is simply no alternative to a radical shift in policy which will have the effect of removing all semi-automatic and automatic guns from possession by the general public.  

Indeed, if America was to follow the example of the rest of the civilized world even single shot guns, both handguns and rifles, would be removed as well and confined to very restricted use by legitimate hunters, sports people and gun clubs.

But that would probably involve constitutional change and we are all aware how difficult that is in the U.S., far more difficult than in Ireland, for example.  Without going that far, although I am not a lawyer or a constitutional expert, it seems clear to me that it should be possible to introduce restrictive legislation at federal and/or state level setting out rules and regulations for gun possession in the US that would be constitutional but still would move the U.S. much closer to the norm on guns in Europe and most other developed countries in the world.    

Much has been made out of the number of guns in circulation in the U.S. and the supposed impossibility of retrieving them.   This is nonsense.  A carrot and stick approach, with a buy back program and heavy penalties, including jail, for failure to take part within a time period would achieve results.  

The American people have solved much more complex problems than this.  The case for change is undeniable.

Niall O'Dowd quoted some statistics on IrishCentral a few days ago which tell the story -- murders with a firearm in one year: Great Britain 14; Australia 59; Canada 144; U.S., 9,369.  He left out Ireland, which in the year in question had 12 gun murders.

The numbers tell the truth.  The National Rifle Association and all the rest of the gun lobby can say all they want, but the message is clear -- gun control works.  

Appalling as school shootings are, the bigger tragedy in the U.S. is the everyday body count due to the use of guns in ordinary criminality, drugs and domestic violence.

Last July, after the Aurora, Colorado massacre, New York City Mayor Michael Bloomberg said that 34 people were being killed with guns in the U.S. every single day.

"We've killed more than 400,000 Americans since 1968, when RFK and Martin Luther King Junior were assassinated. That is more Americans than died during WWII,” he said.

While this goes on in the U.S., the rest of the world looks on in disgust and disbelief.  As other countries have shown, it's not impossible to change.

In Scotland, for example, there was a school shooting in 1996 in which 16 children aged five to six and their teacher were killed.  One year later the U.K. banned the private ownership of all handguns of any size or type apart from airguns.  There has not been a school shooting anywhere in the U.K. since then.

Writing in the wake of the Aurora cinema shooting, I suggested that the U.S. could do worse than look to the system in Ireland for direction.

As I pointed out at the time, there are young men under severe stress in Ireland and other countries in Europe right now, but we do not see gun massacres happening here.  There are isolated, inadequate, resentful young men here, just as there are in the U.S.  A proportion of them will become delusional and dangerous, just as happens in the US.

The difference is that here it is very difficult to get guns, and almost impossible to get automatic weapons and large amounts of ammunition.

It's not rocket science.  It's simple. You stop gun crime by removing guns from the general population.  Yet that is something that America refuses to do.

The idea that true freedom must allow good people to have almost unrestricted access to weapons so they can protect themselves against the bad guys is flawed, and the figures quoted above prove that.

It ignores the fact that if there are very few guns around, it is much more difficult for the low level bad guy to get his hands on one.

The gun lobby argument that "guns don't kill people, people kill people" is also flawed.  The fact is that the more guns there are around, the more people get killed with them.

The reason is simple. Killing someone with a gun is easy; killing someone with a knife is harder, and also, there are no automatic knives that enable you to kill 26 people with a slight pressure of one finger.

There's no point in grieving for the Sandy Hook children if America does not do something about this because it's going to happen again.  America needs gun control.

That's the reality. It's a reality that almost all other developed countries have accepted, even somewhere like Ireland, in spite of our much more recent fight for national freedom and our rebel image as the fighting Irish. As I said, America could do worse than copy what we have done here.

In Ireland, you can't have a gun unless you can convince your local Gardai (police) that you are a farmer who wants to control vermin, or you want to use the gun for hunting in the countryside -- well over 90 percent of guns held here are shotguns and sporting rifles used for hunting or controlling vermin.  These weapons are usually single shot and never automatic.

If your reason for wanting a gun is to do target shooting, you have to belong to a recognized gun club where very strict rules will apply.  This includes where and how the guns are stored.  Almost no handguns (pistols or revolvers) are allowed in private possession outside of gun clubs.

Anyone who wants a gun here has to get a license from the police, which specifies the type of gun, as well as a small quantity of ammunition.  This has to be renewed every three years.

A separate certificate is required for each gun, and police are slow to issue more than one to a person without good reason.  Handguns are severely restricted with very few in private possession, and those are limited to small caliber guns or air guns.

Similar regimes apply in other countries and no one seems to find it a problem.  So why should it be a problem in the U.S.?

This week there are people all over America deciding on Christmas gifts for their children. Well here's an idea -- tell your children that one of your presents to them will be a promise that next year you will campaign for or support major change on gun laws in the U.S. And explain to them why this will be the best Christmas present the children of America will ever get.

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.

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.  

Irish Golden Circle still shining despite massive recession -- Still running the show despite bankrupting the country

Brian Goggin, formerly of the Bank of Ireland

They were called the golden circle, the people in the inside loop who made lots of money during the boom years here.

I'm not just talking about the property speculators and developers playing with their borrowed billions who were in an inner platinum circle all of their own.  The golden circle was far wider than that.

It included bankers, lawyers, accountants, financial advisers, brokers, management consultants, IT experts, the top layer of professionals of all kinds -- and it also included the senior levels in the civil service and state agencies, the guys and gals who actually run the country for the politicians.

So having comprehensively screwed up the country and plunged us into a financial catastrophe so bad that we had to be rescued by the IMF and the EU, all these guys and gals are now out of a job, right?

Not at all.  This is Ireland, after all.  The unbelievable, extraordinary truth is that almost all these experts and advisers have held on to their top jobs and are still doing very well, thank you very much.

While the ordinary folk here struggle in the darkness of lay-offs, welfare cutbacks and tax hikes, the sun is still shining brightly on our golden circle.

Of course there has been some token changes.  At the very top of the Department of Finance, the Central Bank, the Financial Regulator's office and, of course the banks, a few people were shifted.  A couple went to cozy positions in Europe with big salaries attached, and the others were put out to grass with pension pots worth millions and huge golden handshakes so they can continue to enjoy the privileged lifestyles they expect.

Only a very small number of people were moved from the leadership roles they had.  In fact you could count on two hands the number of top dogs who were moved.

The majority of the top layer of people, who all played a part directly or indirectly in destroying our economy, are still there.  The senior civil servants,  the financial experts, the consultants, the lawyers, the accountants and auditors are all there and still being paid boom time salaries and fees.    

The game has changed, of course.  Instead of advising the government and businesses on the boom, they are now advising them on the bust.

The bankers and accountants and auditors and consultants who failed to see the developing bubble are now the ones making fortunes dealing with all the businesses that are going bust.  Dozens of them have even been hired to play key roles in NAMA, the national bad bank where all the toxic property loans have been dumped.

So the very people who made the mess are now the ones making a very lucrative living out of trying to sort it out.   Two or three of the biggest legal firms and  accountancy firms here which were up to their necks in the boom are now "advising" on the bust.

This is enough to give you indigestion.  But what is really sickening is that the members of this very large golden circle are still charging eye-watering fees for their services.

We're talking hundreds of euros an hour here.  And

they are getting away with this even though the country is broke -- and it's broke thanks to their incompetence.

It starts right at the top, of course, with our politicians, who are paid far more than their European counterparts.  We all know the taoiseach (our prime minister) earns more than the U.S. President.  But he also is paid more than the British prime minister and more than the heads of most European countries, which may be a less dramatic comparison but is more relevant.

The same applies to the civil servants who head up government departments here, and to many other areas of Irish government and professional life.  Consultant doctors and top lawyers in Ireland earn far more than their counterparts in Europe.

Further down the ladder, senior teachers here earn at least 20 percent more than teachers in Britain, for example.  And it goes on and on, increasingly dividing Irish society into those who are comfortable and those who are struggling to make ends meet.

The common factor among those who are doing okay -- in case you haven't spotted it already -- is that they all work for the state or for semi-state organizations (except for the bank bosses, although you could say they also work for the state since the state now owns the banks).

This influences fees that are charged by others who provide professional services to the state (like lawyers and accountants) and so they keep their fees and charges high.  Why should they bring them down when they see all the others in the golden circle hanging on to their high pay and status?

What all this means is that we are developing two Irelands.  There are those who are paid by the state, directly or indirectly, and who see no reason to moderate their pay or pensions as long as the state can borrow enough to keep going; since it's all paid for by borrowing, there's no real limit.

Then there is everyone in the private sector, where pay and pensions depend directly on the ability of a company to make a profit and stay in business --and for more and more of them, the cost of keeping a job or continuing to get a pension means taking huge cuts in what they are getting.

The pension divide between the two Irelands is even more nauseating than the pay situation.  Let's start with two of the most infuriating examples from the top of the golden circle.

You may remember the name Brian Goggin, the boss of Bank of Ireland during the boom.  You also may remember the name Eugene Sheehy, who was the boss of AIB during the boom and property bubble, which of course only happened because the two banks (the biggest in Ireland) made it possible through reckless lending.

Sheehy has a bit of extra notoriety because he was one of the senior bankers who had the late night meeting with the taoiseach and the minister for finance in September 2008 and pleaded for help to help them get through their "temporary liquidity problem."

The result was the government guaranteed all bank debt, a decision that has bankrupted the country because the real level of the bank debts was many times greater than Sheehy and his buddies revealed to the government that night.

The banks did not just have a liquidity problem. They were insolvent.  They were completely bust,  owing tens of billions of euro with not a hope of ever being able to pay it back.

So Goggin and Sheehy were major players in destroying the Irish economy and losing us our economic sovereignty.  Not only that, but we taxpayers have had to meet the cost of pouring billions into AIB and Bank of Ireland to keep them open.

Did the two boyos go to jail?  Or even have to do some community service to atone for what they had done?  Not at all.  This is Ireland, after all.

They were both moved, given early retirement.  And this is the best bit.  Goggin is on a pension of €650,000 a year for the rest of his life. Sheehy's pension is €450,000 a year for life.

Both are still relatively young.  Sheehy has gone

back to college.   Goggin is back at work, playing a leading role in a multi-billion U.S. investment group that is targeting distressed property loans in Ireland and buying baskets of insurance policies from finance institutions here that are under pressure.

These are extreme examples of the way golden circle members here get looked after.  But the same stuff goes on all the way down the state food chain, with state employees getting very generous guaranteed pensions for life, typically between half and two thirds their final salary.

And it's all funded by state borrowing, so there is no limit on what it costs.  Contrast this with the private sector, where almost 80 percent of company pension funds are bust, thanks to the financial collapse.

Let's take an example to illustrate what's going on.   The pension fund in Independent Newspapers, the biggest newspaper group in Ireland where this writer has worked, now has a black hole in it of some €160 million and is probably going to be closed down, leaving a lot of people with little or nothing.

Meanwhile out at Dublin Airport, the umbrella pension fund that looks after staff in Aer Lingus, the DAA company that runs Irish airports and a linked aircraft maintenance company, has a black hole in it of €750 million.  Because Aer Lingus and the DAA are semi-state companies, the unions are trying to force the government to pump money into this pension fund so staff can get their full pensions.

And you are all going to know about this very soon because the unions are threatening a wave of strikes in the run up to Christmas that could disrupt trans-Atlantic flights.  

The fact that the pension fund is bust -- there's no way back from a €750 million deficit -- and the state is bust, makes no impression on these semi-state workers.  As far as they are concerned the state must borrow to back fill their pension fund. It's that simple.

In the real world of the private sector, such nonsense is not an option for workers because their companies cannot borrow like this and could go under if they tried.  Independent Newspapers is already struggling for survival, quite apart from its pensions problem.

It's a two Ireland scenario.  Unfortunately the politicians and the civil servants who run the country are all part of the Ireland that is okay.

They talk a lot, but there is no action to reduce the problem for the private sector workers who are part of the other Ireland.  Instead we get lectures from union leaders about avoiding a race to the bottom in wages and pensions.

Like I said, the golden circle is still shining, but the glow is making the rest of us feel like throwing up.

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.

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. 

Scandal over public service pensions continues as IMF calls time on state workers

Taoiseach Enda Kenny and Tanaiste Eamon Gilmore. 

Over the past two weeks this column has been dealing with the scandal of state pay and pensions in Ireland.  I thought I was a voice crying in the wilderness for a while, but this weekend the issue
became the top story here and the IMF waded into the argument.

It's easy to summarize the problem.  Close to 20 percent of the national workforce here are on the state payroll, and their pay and pensions have been protected from the economic collapse during the past few years while pay and pensions for everyone else have been severely affected.

In the private sector (the businesses that make up the real economy) pay has been cut, hours are longer and any extras have been eliminated as companies across the country relentlessly cut costs in an attempt to survive the financial crisis.

Fearful of joining the almost half million out of work, employees take the deep cuts to hang on to their jobs.
To add to the misery in the private sector, the pension funds run by most companies for their staff are now on the brink of collapse.  Although the workers have been paying into the funds over the years, the investments have been decimated on the stock markets and the funds now can't pay the pensions.  

As I explained here two weeks ago, many of these pension funds will only be able to pay out a fraction of the pensions they were committed to providing.

For the workers in the state sector however -- including the teachers, police, nurses, soldiers, diplomats, politicians, college lecturers and the vast army of administrators who work in government
departments and semi-state quango organizations funded by the taxpayer -- pay and pensions are virtually untouched.  For them, as I said here last week, the boom never ended.

How come?  The state is bust, after all.  We are borrowing close to € 1 billion every month to pay the state workers their boom time level pay and pensions.

We go on doing so because the government is afraid of the unions in the state sector who threaten chaos if they have cuts imposed on them.   Around 80 percent of the people who are on the state payroll are in unions, which compares with about 20 percent of the rest of the workforce.

The state sector is the last bastion of union power in Ireland, and even though the state worker unions know the privileged position they are defending would make James Connolly spin in his grave, they go on holding the rest of the workforce in the country to ransom out of sheer greed.

A key player in this dirty game is the Labor Party, which is heavily dependent on the state unions and therefore seriously compromised in its role as part of the coalition government.    It is defending the Croke Park Agreement (CPA), the deal reached by the last government with the unions which guarantees no pay cuts for state workers between 2010 and 2014 in return for a no strike guarantee and increased efficiency in public services to cut costs.

As I pointed out here last week, the situation has led to sharply divergent views among ministers in the government, even Labor ministers.  Brendan Howlin, the Labor minister in charge of managing overall state spending, is claiming that the CPA is doing what it promised to do -- delivering change to make public services more cost efficient.   Numbers of state workers are being reduced and workers are being moved around to fill gaps.

An example would be the transfer of state workers from other areas into welfare offices to deal with the high number of unemployed people.  This kind of flexibility which is normal in the private sector is seen as a big concession in the state sector.

Instead of cutting pay and pensions to match the cuts in the private sector, the number of state sector workers is being gradually reduced to produce an overall saving in the state payroll bill.  But there is a limit to how far this can go without damaging state services to the public.

A far better way would be to maintain the number of state workers to keep up services but cut their pay and pensions.  But this is ruled out under the CPA.

Two of the biggest spending departments are health and education.   Last week in this column I was talking about a €150 million emergency cut in spending the minister for health was bringing in to reduce the €500 million overrun he is heading for by the end of the year and which the IMF has ordered us to correct without delay.  

Part of that was a cut to funding for personal assistants for seriously disabled people, which led to an all-night protest by the disabled outside the Dail (Parliament).  It was always going to be an emotive issue.

The minister caved in and the saving is now to be spread across other health areas like administration and transport.   But one can understand why the minister was taking such drastic action.

Because 80 percent of health spending goes on pay and pensions in the sector and that cannot be touched under the CPA, making savings in health spending has to mean cutbacks in frontline services.   Even for the disabled. No one in the unions mentioned that the savings required could easily be made in pay and pensions for health workers.  

And health workers, like most state employees, are actually getting an increase in pay this year.    

Education is also interesting because it is another department where over 80 percent of its huge budget goes on pay and pensions for teachers.  There has been an ongoing row about special needs assistants (SNAs), teacher's aides in classrooms who help with children who may have a mild handicap or difficulty.

Their number has been cut, which led to an outcry by parents and teachers.  Yet no one mentioned the elephant in the room -- a cut in teacher pay (teachers in Ireland are among the highest paid in Europe) could have delivered the saving needed to keep on the SNAs.

Another aspect of what is going on is also seen in education.  The CPA protects pay for existing state workers, but not new entrants in various areas.  

Recent figures show that new schoolteachers here are now being paid €11,000 less than new teachers in 2010 (starting salary of €27,000, down from €38,000).  

This is very tough on the young teachers starting their careers and the unions have been making noise about it.   But they are silent on the fact that most teachers (the older ones who have been teaching at least a few years) have their high pay completely protected by the CPA.

This is happening in other areas of the state sector as well.   The majority of state workers are protected by the CPA, and the unions ignore the plight of their younger colleagues rather than spread the impact of the needed cuts.

This is what the state sector unions here have become -- a protective clique safeguarding the pay and pensions of their existing members, the majority of whom are older and very comfortable.

This does not stop them lecturing the EU/IMF, the government and even the Irish public about how reducing our budget deficit must be made in a way that takes account of "the need to protect the vulnerable in Irish society."   The hypocrisy involved is nauseating, particularly on the part of the senior Labor Party people and the union leaders.

The furor caused a week ago by the minister for health's attempts to shave just €150 million off his €13 billion health spending this year is an indication of the scale of the problem facing the government.  If they can't save €150 million how are they going to find the €3,500 million they have to save in the budget in December, between spending cuts and tax hikes?

There is a very simple solution, of course.  I suggested it here two weeks ago.  

They should assess the effect of the crisis over the past four or five years on pay, and particularly on pensions across the private sector in Ireland by doing a survey of the top 100 companies.   Apply the same percentage reductions in pay and pensions across the state sector.

This would save several billion a year and would mean that the €3.5 billion in budget adjustment needed in the December budget for 2013 could be accomplished with far less pain for the ordinary citizen.

Matching state sector pay and pensions to the private sector averages would have an ongoing effect in the coming few years, especially in pensions.  This would help to close our budget gap much faster.  

Doing this would also mean leveling the pay and pensions playing field so that everyone here, private and state sector workers, would be sharing in the cutbacks that have to be made.  Apart from anything else, that would be fair to everyone.  

It would also prevent the seething anger that will emerge here if €3.5 billion in cuts are imposed in the December budget but pay and pensions in the state sector remain untouched.  

It would mean dumping the CPA immediately, but there is a sound justification for doing so.  Every national wage agreement here in the past included an "inability to pay" clause so that individual companies who were in trouble could avoid paying increases by showing their accounts to the unions.   The CPA has a similar clause in it, and since the Irish state is bankrupt the government certainly qualifies as an employer who is unable to pay.  

This would also mean an end to the farcical system of annual increments (pay hikes) which all state workers get.   As I said here last week, this means that state workers are getting an increase in pay this year while workers in the private sector face ongoing cuts.

Both the EU and the IMF have indicated that they want the government to do something about the CPA now because we can't afford to wait until it runs out in 2014.   Instead of confronting the unions and hauling them into the real world, however, Taoiseach (Prime Minister) Enda Kenny and Tanaiste (Deputy Leader) Eamon Gilmore both stated over the weekend that the CPA must be allowed to run its course.  

But what would you expect?  They're on the state payroll as well.