The next Irish Troubles?

The last Irish Troubles were good for no one. The next Irish Troubles may be good for everyone except the bankers and the European elite.

In short, it appears the resistance is moving to Europe.


First the French struck against Sarkozy’s plan to raise the retirement age in France. Sarkozy defiantly passed the plan anyway, and is now facing serious challenge from left politicians, including the highly popular Dominique Strauss-Kahn, and his last-election rival, Ségolène Royal.

(A side note: Those French demonstrations were universally reported as “riots” in the U.S. press. I can personally state they were not riots. It’s as though the U.S. press were saying with one voice, “Don’t be like those French, Mr. & Ms. Worker. Surrender peacefully or you’ll look bad.”)

Next U.K. students staged rolling reactions to the Conservative plan to drastically increase tuitions. Critics of the move (including those in the streets) say its effects will include lessened social mobility and a heavily debt-encumbered working population. (Sound familiar? Thank you, Ron.)

Now Ireland is ripe, more than ripe in fact, with a cause that is much more direct. The problem is not an economic attack on the elderly (France, U.S.) or a cultural attack on the working class (U.K.). It’s a direct drain of the national treasury by … bankers. How much more clean can the narrative be?

Paul Krugman gave us the story in a column just two weeks old. Krugman:

The Irish story began with a genuine economic miracle. But eventually this gave way to a speculative frenzy driven by runaway banks and real estate developers, all in a cozy relationship with leading politicians. The frenzy was financed with huge borrowing on the part of Irish banks, largely from banks in other European nations.

Note the list — speculative frenzy, runaway banks, real estate developers, and cozy politicians. The four basic food groups.

When the bubble burst, the banks and cozy politicians put the Irish people on the hook for the private banking debts. And an international conspiracy of voices shouted, “Do it to calm the markets. The market will kill you if you don’t.”

The Irish knuckled under, instituting harsh austerity, and the market is killing them anyway. The private bankers are being made “whole” (did I spell that right?) by the suffering of almost every actual human in Ireland. Krugman again:

Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt.

Normally when this happens, the pro PR campaign, coupled with Serious pundit voices, rolls the complacent, big-screen-blinded public back to sleep. (Ignore that hand in your pocket; it’s just glad to see you.) Welcome to the U.S., land of the sleepy Teabagging brave.

But the Irish are taking notice. Writing at the site The Irish Economy, Kevin O’Rourke offers this, by economist Barry Eichengreen (my emphasis):

The Irish “program” solves exactly nothing – it simply kicks the can down the road. A public debt that will now top out at around 130 per cent of GDP has not been reduced by a single cent. The interest payments that the Irish sovereign will have to make have not been reduced by a single cent, given the rate of 5.8% on the international loan. After a couple of years, not just interest but also principal is supposed to begin to be repaid. Ireland will be transferring nearly 10 per cent of its national income as reparations to the bondholders, year after painful year.

This is not politically sustainable, as anyone who remembers Germany’s own experience with World War I reparations should know. A populist backlash is inevitable.

That was early December — this month. Later, O’Rourke passed this lament (my emphasis again):

It is one thing to know that someone you love is terminally ill; their death still comes as a shock.

I certainly don’t want to compare the arrival of the EU-IMF team in Dublin last week to a bereavement. But I was surprised at how upsetting I found it, given that it came as no surprise. It had been clear for a long time that the blanket guarantee given to the liabilities of Ireland’s rotten banks, in September 2008, had saddled the State with a debt that was too big for it to handle. Ten successive quarters of declining real GNP, and one attempt too many to draw a line under the losses of our banks, made our exclusion from international capital markets inevitable. But to know something is one thing; to see it actually happen is something entirely different.

I am not alone in feeling this way, it seems. The economics editor of the Irish Times, Dan O’Brien, wrote that

nothing quite symbolised this State’s loss of sovereignty than the press conference at which the ECB man spoke along with two IMF men and a European Commission official. It was held in the Government press centre beneath the Taoiseach’s office. I am a xenophile and cosmopolitan by nature, but to see foreign technocrats take over the very heart of the apparatus of this State to tell the media how the State will be run into the foreseeable future caused a sickening feeling in the pit of my stomach.

Imagine that here — “foreign technocrats take over the very heart of the apparatus of this State to tell the media how the State will be run into the foresee
able future”. Forget the “how” of getting there; just imagine your feeling as you watch. It’s like watching the victorious Spartans burn the last ships of the Athenian fleet to their hulls, as the people watched in Pireaus harbor. The end of sovereignty.

O’Roarke closes:

Iceland is an obvious model for us. In a referendum, her voters have already rejected a proposal to pay back their banks’ creditors, who will take major losses. Now they have elected a constitutional assembly charged with drafting a new constitution. Ireland probably needs this more than does Iceland; I wish I were more confident that we will follow the latter’s example.

Iceland and Ireland, a living present test tube.

This could be a turning point in Ireland. At the moment, the Irish are emigrating, leaving Ireland again. But they could stand fast in the next election, and nullify or renegotiate their terms of surrender. If so, the whole force of Establishment Europe will press against them.

And then it will be Ireland’s turn to join France and England. If they resist, welcome to the next Irish Troubles. The New Europe indeed.

GP


Gaius Publius is a professional writer living on the West Coast of the United States.

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