Ireland’s economic crisis was/is a banking crisis along with a political landscape shift where political parties moved to a centre ‘third way’populism characterizes by an addiction to focus groups, constant polling and the buying off of key sectoral interest groups.
It is a political culture that has destroyed, not only Ireland’s balance of payments, but attacked the very fabric of Irish society, exposing a criminal lack of vision and a complete inability to long term plan for a more inclusive sustainable society.
Here is a quick check list of what has happened in Ireland:
- Light touch regulation facilitated by senior politicians, regulators and heavily lobbied for by key financial institutions leading to accusations of ‘croney capitalism’
- A wild west jamboree of wreckless lending by bankers to big developers, devoid of regulatory risk assessment at regional, national and at European level
- A compliant media that relied heavily on the advertising revenue from estate agents to fuel the building boom
- A media that constantly relied on economists who talked up the building boom but who, in reality, and in most cases, were spokespersons for the major financial institutions
- The lobbying of politicians leading to the granting of self-regulation by builders/developers which allowed them to use their own surveyors to sign off on their buildings.
- Corruption within the planning process where politicians and officials received payments for voting to turn agricultural land into development land, often making massive profits for all involved.
- Lax planning controls at regional level allowing the construction of poorly insulated housing in inappropriate sensitive rural areas , sometimes on flood plains and with no access to vital infrastructure, eg public transport, hospitals, broadband.
- This, in turn, has led to a blight of unfinished housing or ghost estates, almost 3,000 of which are littered across the countryside
- The complete abdication of responsibility for their actions by overpaid Boards of Directors of financial institutions – many of these directors serve on multiple boards and had appointed each other to their respective boards.
- The auditors of the big financial corporations have not been investigated or held to account. Many are global financial players – Ernst & Young, PwC, Deloitte, KPMG. What were they doing sanctioning false balance sheets?
- The banks were bailed out at the expense of taxpayers, and, having lied about the extent of their insolvency and risk exposure, had to be bailed out a second time.
- Senior bankers responsible for bringing the country to its knees have either fled the country, been extravagantly paid off and compensated or have remained in key positions.
- No senior banker or financial institution CEO has been brought to court or been jailed.
- Unprecedentedly, senior bank bondholders who, in effect, are global investors, have been protected and are being paid off in what commentators have described as ‘privatizing profits and socializing losses’ or ‘socialism for the rich and capitalism for the poor’.
- The IMF/EU/ECB bailout is totally unsustainable and is crippling Irish taxpayers and their families.
- There have been inquiries to find out what happened but their terms of reference have been weak and the reporting, in many cases, has fallen way short of what is required.
- Finally, no one has been held accountable – no senior politician, no senior banker, no developer, speculator, financial regulator or auditor has been identified as guilty and punished. On the contrary, they have been lavishly compensated and paid off. They have acted with impunity and have been left unaccountable.
- Meanwhile vital frontline services in health, education, care and social welfare have been savagely cut while unemployment has soared to nearly 15%. Immigration is a consistent feature. House prices have fallen through the floor, government austerity budgets have placed enormous financial burdens on hard pressed families and the banks continue repossessing worthless properties.
- The lingering time-bomb for financial institutions now is the massive amount of mortgage defaulters that continue to increase their exposure.
Sound familiar Spain?