January 3, 2012
With draconian cuts in their standard of living, the potential collapse of the European Union, and the irrelevance of the Catholic Church in their lives, the people of Ireland are looking at a bleak 2012 as the new year dawns. The huge debts run up by swashbuckling real estate developers and crooked bank officials, which required massive borrowing from Europe, have placed a horrendous burden on the Irish government and the Irish people.
While officials have received praise for their efforts to correct the situation, the new budget released by the Fine Gael/Labor coalition government raises taxes, reduces entitlements, and takes away significant funds from an already suffering Ireland where, in the third quarter, the Gross National Product number fell 1.9 percent, a signal, maybe, of a new recession.
The effects are a slowing economy, and less cash being spent because people don’t know what to expect, and are holding onto their wallets.
The country’s farming, forestry, and fishing industries continue to do well as does the export side of the economy, which is being fueled by American manufacturing investment, but at the same time, the government is reducing the number of teachers, closing medical centers, cutting the government work force by 6,000, reducing public service pay, and instituting cost savings in a large number of other programs.
According to the Irish Times, the three highest spending departments will be cut severely: health by 540 million euro, social protection by 475 million, and education by 132 million. Overall, the government will cut 2.7 percent from 2011 spending levels this coming year.
But that’s only part of the story. Student contribution charges for their university educations will increase by 250 euro each, a tax by another name. Every homeowner in Ireland will be forced to pay a 100-euro fee called a “Household Charge,” something that 15 members of the Irish Parliament said they would not pay. The government responded by saying the charge would be deducted from their salaries. The fear is that, like property taxes in the United States, the 100-euro household tax will grow substantially over the years.
The Irish tax system includes a Value Added Tax (VAT) on all goods sold. This is the one that tourists can get back at the tax window in the airports. Currently at 21 percent, it will be increased to 23 in the coming year. In many ways this is a hidden tax since most retail prices don’t advertise the amount – but it is a tax that has an impact on the standard of living for every consumer, rich or poor.
With the lower expenses and increased revenue, the government hopes to be able to pay the European banks and the International Monetary Fund what Ireland owes them.
But the European Union itself is not doing that well and several countries within the union are in more serious trouble economically than Ireland. Germany and France control most of what goes on in the organization, earning the disdain of Britain, which believes fervently in its own sovereignty and refuses to participate in the euro currency. In late December, Britain refused to help fund a European common bank fund designed to help floundering states.
All this must confuse the average Irish men and women who simply want to get on with their lives.
In fact some leaders in Ireland are openly critical of the European Union, most notably Ed Walsh, the onetime president of Limerick University who recently gave an impassioned speech in Cork criticizing Ireland’s participation in the Euro union. And further unrest was generated by an article in The Wall Street Journal saying that the Central Bank of Ireland is evaluating printing facilities necessary to print Irish pounds once again.
What is clear, however, is that there is a growing sentiment among Irish leaders to carefully evaluate its relationship with Europe.
In addition to the uncertainty surrounding the cuts and the relationship with Europe, the Irish have lost confidence in the institution that has always offered a refuge in troubled times: the Catholic Church. It is no longer a powerful and integral part of Irish life. Dramatic evidence of this came in mid-December from Archbishop of Dublin Diarmuid Martin’s report on the state of the Church in his diocese.
Of the Dublin Catholic population of 1,162,000, only 14 percent go to Mass weekly. Sunday collections for the support of the priests and the many charitable endeavors of the Church are down appreciably. What seems to be a continuing tolerance of pedophile priests has many Catholics disillusioned with their church. The archbishop has been outspoken about the apparent lack of firm action being taken to prevent these atrocities.
And Ireland’s leaders, including Prime Minister Enda Kenny, recently showed their anger by summarily closing the Irish embassy at the Vatican. It is not an exaggeration to observe that the Church has lost its credibility with the Irish people.
The Vatican has appointed a new papal nuncio to Ireland, Monsignor Charles Brown, a New Yorker, who is said to be close to Pope Benedict. A young man in his early fifties, he may be just the personality required to begin to repair the damage. But in the meantime, the individual Irish parishioner is left to rely upon his or her personal faith in the Church.
Yes, conditions are difficult and the future is uncertain, but history has shown that there is strength and courage in the Irish culture and character forged over the last 400-500 years that can’t be defeated. Every nation seems to develop its own character traits and abilities to cope with adversity. The Germans, French, Spanish, and English are all quite different in that way.
It is important, then, to note that the Irish people have a record of succeeding in the face of great adversity.