Taoiseach Enda Kenny is the focus of mounting anger in the 26 Counties after criticising the Irish people for their “greed” and “mad” borrowing-- just days after he paid one and a quarter billion euros of public funds to international bond speculators.
Kenny was speaking on Thursday during the World Economic Conference in Davos, Switzerland, when he delivered an apparently planned statement on the state of the nation’s finances.
“What happened in our country was that people simply went mad borrowing,” Mr Kenny said.
“The extent of personal credit, personal wealth created on credit was done between people and banks - a system that spawned greed to a point where it just went out of control completely with a spectacular crash.”
While his comments were welcomed by the international financiers, bankers and global power-brokers in his audience, they were received with disgust at home.
The comments contrast sharply with his televised statements in a ‘state of the nation’ public address last month. On that occasion he declared: “Let me say this to you all: You are not responsible for the crisis.”
His government was already facing anger over its bizarre attitudes after Finance Minister Michael Noonan last week said young people were emigrating as a “lifestyle choice”.
Tanaiste and Labour leader Eamon Gilmore joined in the headlines when he dismissed Wednesday’s unprecedented payout to unsecured bondholders of 1.25 billion euro (1.64 billion dollars) as “a bit of a sickener”.
Responding to the Taoiseach’s comments in Davos, Sinn Fein’s Padraig Mac Lochlainn said it was outrageous that the Taoiseach was blaming the people for a crash caused by poorly regulated, profiteering financial institutions.
“This analysis that people in Ireland went drunk with credit, were reckless and they have to now be cleansed by a decade of austerity to clean them of their sins is very worrying.
“People were aggressively cajoled, every time you opened your newspaper or put on your TV. What you had was aggressive lending by the core banks that toyed with low interest rates. It was like crack cocaine.”
Mr Mac Lochlainn said Mr Kenny was feeding into Franco-German propaganda of justifying austerity in Ireland.
A spokesperson for the United Left Alliance added: “Ordinary householders borrowed because of the excessive price of houses.
“The ULA puts the blame squarely at the foot of developers, bankers and speculators who conspired to create a massive... bubble in the market.”
There was tension in the Dublin parliament earlier this week when Kenny professed ignorance of the identity of the recipients of Wednesday’s bondholder payment.
The Taoiseach admitted the current bondholders were not those who had originally funded Anglo Irish Bank, but were short-term speculators. A list of the paid-off bondholders later emerged, headed by Goldman Sachs and including leading French, German and British financial institutions.
During Leaders’ Questions in the Dail, Sinn Fein leader, Gerry Adams described the 1.25 billion euro handover as “scandalous”, particularly in light of the circumstances that ordinary people found themselves as a result of the government’s cuts and taxes.
“Last year the government gave the banks 20 billion euro. At the same time there is too little investment in job creation and a whole series of new and additional ‘stealth’ taxes have been introduced which are crippling low and middle income families and the poor,” he said. “Today’s payment to unsecured, unguaranteed bondholders in the former Anglo Irish Bank is further evidence of the failure of government austerity policies.”
He noted that by the time the government concludes paying the next 3.1 billion euro promissory note, the state will have spent 74.6 billion euro on such payments.
“We believe the government should tell the European Central Bank that it cannot afford [the payments] and begin serious negotiations to secure an acceptable resolution that works for Irish citizens.”
HEALTH CARE DANGERS
In related developments, the head of the state’s health services has admitted that there will be widespread failures in basic health care as a result of the number of staff, 3,300, who have been cut from the organisation this year.
And on Thursday morning, Sinn Fein’s Martin Ferris had to be expelled from the Dail chamber as a debate on the latest stealth tax, a ‘sewage tank inspection charge’, was cut short.
“It is absolutely shameful that the day after the government allows the hand over of 1.25 billion euro of taxpayers’ money to Anglo bondholders, yet another tax will be foisted on already struggling people,” he said.
Public protests against the government’s economic policies are also slowly increasing. On Wednesday morning, over 40 members of ‘Occupy Dublin’ locked down the Department of Finance in protest against the bond repayment. The group chaining themselves to the building using special concrete-filled locks which took hours to remove.
In Cork, group of ‘Occupy’ protesters forced their way into the offices of the former bank on Anglesea Street, chanting “power to the people” while an uilleann paper played ‘The Boys of Kilmichael’. Sinn Fein also organised a protest outside County Buildings in Galway and in other locations.
The arguments of Sinn Fein and the other left-wing organisations received the unlikely support this week of Nobel prize-winning economist Joseph Stiglitz, who described the continued payments by the coalition to unsecured bondholders as “unconscionable”.
He said a simple fact was being overlooked: that unsecured bondholders were paid a normal interest rate for bearing a risk by investing in Irish banks, which is the nature of the market economy.
“Why should Irish taxpayers have to give up health and education to make good on a loan from a private bank when the previous government failed to do an adequate job of regulation?” asked Mr Stiglitz.