Ireland Calling by John Spain
Ireland's economy is also lost in the volcanic dust
Posted on Tuesday, April 20, 2010 at 11:41 PM
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- Vintage pamphlets offer a glimpse at the rules of 50s-era Irish Catholicism
- A leap of faith by Ireland, the exit from the IMF/EU bailout
- A temporary detour from ecomic issues to Irish soccer madness
- Give Britain a break after decades of Irish emigration to the UK
It's a bit like being in an episode of Lost, except that we're not killing each other. Not yet anyway.
But since that vast cloud of volcanic dust from Iceland moved over us last week and grounded the planes, we're certainly cut off from most of the rest of the world. It's a reminder of something we easily forget -- we're an island nation, stuck out on the edge of Europe. Without air transport, it can feel pretty lonely out here.
Not needing to travel at the moment, it doesn't bother me. In fact I rather like it, for purely selfish reasons.
I live on the coast on the northside of Dublin close to the flight path of the planes coming in to land at the airport. Suddenly, with no planes in the sky, I am rediscovering what total silence is like. Especially in the early morning, when the noise of planes arriving and departing Dublin Airport is usually an endless background rumble.
The total silence, apart from the bird song, is wonderful, a bit like going back to childhood days before Ireland got so busy.
But for people who need to travel, it's anything but wonderful. In fact it's a total nightmare.
We still have the ferries -- if you can get a ticket -- to take us to Britain and the north of France. But they're fully booked, slow, and the trains at the other end are packed. So without being able to fly, it has felt rather cut off here over the past four of five days.
No doubt the volcanoes in Iceland will calm down in time and stop filling the skies with volcanic ash, although there are fears that the eruptions could leave us lost under the dust clouds all this week, and possibly longer.
But we're lost in other ways as well, ways that are just as serious and that are our fault rather than the fault of nature. Over the past week, we have seen growing signs that we have lost our way as a nation, beaten down by the enormous economic problems we face.
Sticking together is something that the Irish used to be good at. When the going got tough, helping each other and sharing the pain was what Irish people did.
There was a sense of unity, a generosity of spirit, an eagerness to share the load that seemed to be uniquely Irish. It was something you could always rely on, wherever you were and whatever the circumstances.
Social cohesion is what the academics call it. It's a vital quality for any country in difficult times.
And sadly we seem to have lost it. Somehow we mislaid it somewhere during the selfishness of the boom years and we never got it back.
In its place, we now have an attitude of every man for himself, of grabbing all you can and hanging on to it even if it means everyone else will have less. The economic crisis we face has brought out the worst in us.
And that less attractive side of us was on view here last week in several ways.
First there was the rejection by the unions who represent most state workers of the deal that had been worked out between the government and the union leaders a few weeks back at a marathon conference at Croke Park.
That meeting had been held to try to avoid further stoppages and go slows by workers in the public services, the most visible effect of which had been the long delays in getting a passport recently.
The public sector workers -- teachers, nurses, police, civil service, etc. -- are unhappy because over the past year their pay has been cut by between 10-14% (although part of that is a levy to help pay for their pensions). From the government's point of view, the cuts were essential to stop the country going bankrupt, because pay for state workers is such a large part of total state spending here.
Relative to our size, we have a lot of state workers. We are currently borrowing around ****500 million a week for day to day state spending and that cannot continue.
The Croke Park deal guaranteed the state worker unions that there will be no further pay cuts for the next four years, no forced redundancies and no change in guaranteed pensions.
There is not a private sector worker in the country (those of us who are not paid by the state) who has that kind of security. A lot of us already have taken much deeper pay cuts than the state workers.
We don't know how bad it's going to get, whether our jobs will be here next month or next year, whether we will have to take more pay cuts to keep our company going.
We have to accept all that because we don't have a choice.
If my company does not make a profit, I'm out of a job. And at the end, very few of us have generous guaranteed pensions like state sector workers. In fact the pensions that most of us have are down the toilet with the stock market.
Given all that, the unwillingness of the state sector workers to accept any pay cuts has caused huge anger among the rest of the workforce here. The go-slows and stoppages that have been disrupting state services were designed to get back the money already taken from state workers.
They didn't get that, but the Croke Park deal did give them a guarantee of no further pay cuts over the next few years. That was an extraordinary undertaking by the government, since we have to cut a few billion more out of the budget each year over the next three years. And it's even more extraordinary that so many state worker unions are now rejecting the deal.
The unions point out that many state workers are not highly paid, earning ****30,000 to ****40,000 a year. It's not a lot, or at least it did not seem like a lot during the boom years.
But it's ***600 to ***800 a week, and that's a lot more than the ****200 which is the basic amount of welfare that the private sector workers who have lost their jobs -- close to half a million of them -- get to live on.
Yet state workers are rejecting the deal and threatening further disruption. They point to the billions being pumped into our banks. How is that possible if they have to take pay cuts, they ask.
But that's a non-argument. We have to rescue the banks. And state workers should have to take pay cuts in line with private sector workers.
Instead of doing that they are using their muscle (unlike the private sector the state sector is still heavily unionized) to protect themselves. And tough on everyone else, as far as they are concerned.
The argument for sharing the pain of the cuts is not helped by the revelations that the banks are still paying their senior managers salaries that read like telephone numbers, in spite of the ceiling put on executive pay in the banks by the government as part of the rescue.
The ceiling is half a million euro a year, which should be enough for anyone. But a few days ago we learned that the top executive in the Bank of Ireland, one of the banks eating up billions in rescue money courtesy of the taxpayer, had ****1.5 million added to his pension pot recently.
When this news broke, there were no apologies from the bank. It was part of his contract, they said.
His contract allows him to retire at 55 on a pension of a few hundred thousand a year, and to fund that they have to stick in an extra ***1.5 million into his pension pot at this stage.
See? Nothing wrong, they said. Just fulfilling contractual obligations.
That's the kind of thing that is driving people here crazy. We effectively own the banks, so how can this happen?
Since the banking crisis hit, about half a dozen of the top management in the main banks have "retired," and we had to watch them (the geniuses who bankrupted the country with their reckless property lending) walk away with golden handshakes and huge pensions.
There was such an outcry when this happened a year or more back that we thought it was over. But not so, it seems.
The culture of huge salaries and limos still persists at the top levels in Ireland. As a result the perception is growing that we are now a two tier state.
There's the top tier, which as well as the bankers includes all the bankrupt developers who still live in their mansions and drive their big cars, even though the state has had to take over their billions in toxic loans.
It also includes lawyers and other professionals, many of them paid by the state, who won't drop their fees. There are all these people in the top tier.
And then there's the rest of us, in the lower tier. We're the mushrooms (they keep us in the dark and throw horse s*** at us!)
All of this is doing huge damage to our society. To our sense of what is fair. To our willingness to accept the cutbacks that must be made in the next few years to balance the budget and get us back on track.
The sense of community, of supporting each other, of caring and sharing, is being eroded. We're lost.
And volcanic dust is the least of our worries.