The line of shame - thousands of unemployed Irish get in line to get out of Ireland

The Overseas Jobs Fair in Dublin two weekends ago attracted thousands of Irish

No doubt you will have seen the pictures last week of the long line of people queuing to get into the Overseas Jobs Fair in Dublin. Effectively they were lining up to get out of Ireland.

It's a shameful thing, when you think about it. But the shame is not theirs.

The shame belongs to the politicians, senior civil servants, bankers and speculators who got this country into the mess it is in.

Inside the fair were exhibition stands with staff from companies in countries like Canada and Australia where they have shortages of skilled workers in all kinds of areas from cow milkers to carpenters, plumbers to painters, truck drivers to teachers.

Outside, the line started early, hours before the exhibition was due to open.

The organizers were taken by surprise at the scale of the demand, with 15,000 or so people turning up.
Eventually, as the day wore on, people in the second half of the line were told they had no hope of getting in. I heard one young woman who had driven up from Waterford being interviewed on radio. She had left home at five that morning.

Now she was going home again, without even getting in to see what was on offer and where. But she didn't sound bitter or angry, just resigned.

That's what being out of work for a couple of years does -- it beats the spirit out of you.

The Overseas Jobs Fair was happening in the RDS, the Royal Dublin Society's huge exhibition center and showjumping arena, just south of the city center. In another part of the complex, at the same time, there was another event taking place, the ard fheis (annual convention) of Fianna Fail. Such irony.
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Outside the RDS there were thousands of people lining up to get a job somewhere overseas. Inside, in another part of the complex, the political party which had ruined the economy was in session.

Outside, those in the jobs line looked worn out and depressed. Inside, Bertie Ahern was grinning away, shaking hands. Brian Cowen stood sheepishly to acknowledge applause.

The party delegates and members from all over the country - over a thousand of them -- were determined to show that, whatever about the mistakes of the past, the party is far from dead.

The new leader of Fianna Fail Micheal Martin, at least, had the good grace to sound embarrassed by the situation and to say sorry. He said he regretted the errors of the past, but he was focused on the future.

And there is such anger out there among ordinary people at the scale of the cutbacks in state spending that Fianna Fail could be back sooner than anyone thinks. As time passes the new government will be blamed for the cutbacks, not the old government.

At least Fianna Fail are contrite. Which is far better than being smug, which the present government manages to be in spite of the situation the country faces.

The present government has nothing to be smug about. Granted they inherited an economic nightmare, but their attempts to grapple with the situation and take the hard decisions have been unconvincing.

Last week they were a year in office and they have little to show for it. Over the past year they have failed to stand up to the vested interests here -- from the state sector unions to the wealthy professional groups -- and have instead squeezed the easy targets, mainly the middle class private sector people who can't defend themselves.

Last year, for example, the government put a new tax on private sector pension funds to pay for a new jobs initiative. This particularly sneaky tax will suck hundreds of millions out of private pensions this year, even though a lot of these pension funds are already in trouble.

The government wanted to be seen to be doing something about the 14% unemployment rate, but they can't get any money for their jobs schemes thanks to the new fiscal rules imposed by the EU and the IMF. So they raided private pension funds.

And how many jobs have been created by this initiative? None, of course.

In spite of what the Labor Party thinks, governments can't create jobs. The money has vanished into the black hole of general state spending.

The only policy this new government appears to have is a relentless positivity, an insistence that we have turned the corner, that we're not Greece, that we're on the path to recovery.

The line of people queuing to get into the Jobs Overseas Fairs in Dublin and Cork last week exposed just how wrong that view is.

Our economy is a mess, and thousands of bright young people are leaving the country every month because they feel there's no future for them here.

Meanwhile, the government is radiating sunshine as though everything is fine.

Instead of taking bold decisions to tackle the size and expense of the state sector we can no longer afford, they are tinkering at the margins of the problem. They are so afraid of provoking a reaction from the inefficient, overpaid army of state workers that they are failing to take real action.

Instead of new stealth taxes and extra charges on private sector workers and their pension funds, the government should be cutting its spending much faster so it can give people an incentive to work harder and expand business.

The scale of the problem is staggering, and it's worth recalling how it happened.

Before the boom here really got going, Irish banks funded most of their lending the normal way, from deposits. Once the boom took off, however, that was too slow and too limiting, so the Irish banks started borrowing from other banks, mostly in Germany and France.

In 2003 foreign borrowing by Irish banks was below €15 billion. By the time the boom was peaking in 2007/’08 the Irish banks had borrowed €110 billion.

Most of this was loaned out to fund property speculation here in a boom that was obviously unsustainable. The European banks involved in the gamble, and the European Central Bank (ECB) which was supposed to be regulating banking in Europe, should now be sharing in the cost of the crash.

Instead of doing so, however, they have insisted on getting all of their money back, and the ECB has insisted that the Irish taxpayer must carry all of the cost.

That has placed a huge burden on our national finances since billions have to be diverted every year from anything productive into simply repaying our debts.

This month, for example, we have to repay €3 billion of around €30 billion in debts run up by Anglo Irish Bank which is now being wound up.
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Unless the government can cut some deal from the EU on the promissory notes involved, we will have to go on paying €3 billion a year every year for the next decade for the debts of a private bank that doesn't even exist anymore.

That ordinary Irish people have to carry the cost of the lunacy that went on in Irish banks during the boom makes no sense. Yet in the warped world of international finance this is accepted as justifiable, if regrettable.

To their shame, the present government, despite huffing and puffing during the election, seem to accept this as well.

The result is that a huge amount of money that could now be helping us rebuild our economy is instead being sent out of the country to repay the foreign banks that speculated on the Irish property boom.

Most of them have been paid off by now, and to do so the government here borrowed tens of billions from the ECB. That's a big part of why we needed the bailout.

The other half of the bailout was needed because once the property boom here collapsed tax revenue dried up, leaving a huge budget deficit. The rising number of people out of work and needing welfare made the situation even worse.

Also, state spending here during the boom went completely off the rails and we are now left with a system of high welfare and benefits payments of all kinds that people have come to expect but the country can no longer afford.

Spending on welfare and the health system here almost doubled during the boom. Adjusting that now with close to half a million people out of work is going to be very difficult. But it has to be done because we're still spending almost a third more than we raise in tax revenue.

Rather than getting lost in the billions, let me give you just one example of how far state benefits in Ireland are out of line with most other places.

One of the most sensitive subjects you can raise here is the old age pension. In Ireland, you get what they call the contributory old age pension at age 66. It's €230.30 a week, which adds up to €11,975 a year.

In Britain the old age pension adds up to £5,311 a year, equivalent to €6,357 a year. So the Irish state pension is almost twice as much as the U.K. state pension.

The average pay of state workers in Ireland increased by 60% between 2000 and 2009. As a result senior civil servants here are paid around double what their counterparts in other similarly sized countries in Europe earn. Teachers in Ireland, for example, earn almost a third more than their counterparts in the U.K.

Yet any suggestion that old age pensions or pay for teachers or nurses has to be reduced is greeted with fury here. Any attempt to do so is likely to end up in street protests which could quickly descend into Greek-style chaos.

Another huge burden being carried by the taxpayer here is the enormous cost of pensions for state workers, which are guaranteed and paid out of current tax revenue (or state borrowing). They don't depend on stock market performance like private pensions. They are pitched at around two-thirds of earnings.

In some sectors (like the police), state workers can get them at age 60 or even earlier. The cost runs into billions for taxpayers every year.

Yet there has been no reform of the system to reflect what has happened to pensions in the private sector.

Other inefficiencies and anomalies crop up regularly. Last weekend, for example, the lead story in The Irish Times revealed that workers in the state sector taking sick leave costs us over half a billion a year.

Workers in the state sector can take seven uncertified sick days in a 12-month period without losing any pay. Or in other words, they can take a long weekend once a month for seven months of the year. If they are on certified sick leave (they get their doctor to sign a form) they get full pay for six months and half pay after that.

No one is saying that people who are sick should not be supported, but clearly this system invites abuse.
Similarly, no one is saying that state welfare payments and benefits should be reduced below what is necessary, but the wide disparity between benefit levels in our system and in the U.K. needs to be explained.

All of this -- and it's no accident that our senior civil servants and politicians are major beneficiaries of the system as it is -- is a drain on what's left of our economy and a serious blockage to our recovery.

Until we change it and until we stand up to the EU on the bank debt issue, the long lines of young people here attending overseas jobs fairs won't be getting any shorter.