Defiant villagers lead Irish debt resistance
By Jamie Smyth | Financial Times,
BALLYHEA, Ireland — A few hundred yards of road, a service station and a church are about all there is to see in Ballyhea. But the Irish hamlet in County Cork has become the center of Irish resistance to E.U.-imposed austerity.
Every Sunday, locals gather after mass to stage a lonely yet defiant protest at the way the European Union and Dublin are handling the financial crisis.
“The government is borrowing money to pay back bondholders of our bust banks while making deep cuts to services and hiking taxes,” said Diarmaid O’Flynn, a sports journalist spearheading the protest campaign, which will hold its 100th weekly march later this month. “They are making us all debt slaves and passing a huge financial burden on to our kids.”
Ireland’s banking crisis has cost taxpayers $85 billion and forced the country into a bailout led by the European Union and the International Monetary Fund. Five years of austerity budgets have carved $38 billion out of the economy, pushed unemployment to almost 15 percent and forced hundreds of thousands of young people to emigrate.
Public support for the European Union has fallen sharply during this period and the Fine Gael-Labor coalition, elected two years ago, has begun to see its popularity wane. But, to the amazement of many people in Ireland and abroad, there has been little of the social protest and strikes that have afflicted other bailout countries, particularly Greece.
“We are inclined to be apathetic as a people. We are certainly not the rebellious Irish that many people think us to be,” said Geraldine Nolan, who travels 31 miles to attend the Ballyhea march and its sister protest in the nearby town of Charleville every Sunday.
Over the past two years, each weekly march has attracted only about 30 protesters. But as the deadline for the next payment of $4.1 billion in banking debt falls due in Dublin on March 31, there are fears the debt issue could yet destabilize the coalition and galvanize the public to revolt at the ballot box – if not on the streets.
One senior government source said the Labor Party, in particular, could face a revolt from backbenchers if no deal were done on $41 billion of so-called promissory notes. These are IOUs issued by Dublin to cover the wind-up of its failed banks at the height of its financial crisis, when it could not raise any money on bond markets.
“There is no doubt a failure to get a deal on bank debt would hit the credibility of the government hard, as a lot of expectations have been raised on this issue,” said David Farrell, professor of politics at University College Dublin.
“The government has really nailed its colors to the mast on the issue,” he said.
Enda Kenny, Ireland’s prime minister, has made getting a deal on Ireland’s bank debt his top priority during Ireland’s presidency of the European Union for the next six months — normally a neutral arbiter role.
Dublin argues that it was forced by the European Central Bank (ECB) to pay back unsecured senior bank bondholders in its failed banks in order to protect the wider euro-zone banking system — but exposing Irish taxpayers to billions of euros in losses.
It has been lobbying Frankfurt for more than a year to reschedule most of the $41 billionin outstanding promissory notes over a 40-year period, rather than 10 years under the current schedule.
Dublin also wants the European Union’s new $667 million bailout fund to take stakes in its existing banks, which it was forced to recapitalize at huge cost during the crisis.
So far, the ECB has balked at rescheduling the promissory notes, over fears this may be interpreted as illegal monetary financing of governments. But Dublin hopes that its rigid adherence to its bailout program — and its need for some relief to facilitate a smooth program exit and help it become the euro zone’s success story — ill be rewarded.
The Ballyhea protesters have already made their case in Frankfurt.
“We Blu-Tacked our 40-point thesis on bank debt on the door of the ECB during a recent protest in Frankfurt, in much the same way as Martin Luther nailed his 95-point thesis on the door of the church in Wittenberg,” said O’Flynn, the protest leader. “We are due in Brussels shortly.”
As the protesters assembled opposite the former school of Ireland’s revolutionary hero and first president, Eamon de Valera, in Charleville, a few weeks before their 100th demonstration, many said it was vital to keep marching.
“I don’t want anyone to think I was a sheep and just rolled over,” said Breda McCarthy. Her eldest daughter recently emigrated to Australia and her youngest daughter is set to leave within months.
“I owe it to my family,” she said.
— Financial Times