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A redundant political class in Ireland

The more Ireland cedes to Brussels, the more people will argue there is little need for an independent Irish parliament

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Ireland watches nervously
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Vincent Cooper
On 3 January 2013 12:59

Politics is dead in the Irish Republic. The Irish parliament, the Dail, is now little more than a rubber stamp for the Troika, the generic name for the European Central Bank, the International Monetary Fund, and the European Union, the three powers to which the country is in hock.

Things are bad. Ireland’s debt to GDP ratio is set to reach 122 percent in 2013, above the 120 percent threshold the IMF considers unsustainable. The total debt of the country, according to an Irish Times report, is €192 billion, four times what it was in 2007, with a projected need to borrow a further €34 billion before 2015.

The fact is that Ireland is technically cash-flow insolvent. The country simply doesn’t have the revenue to fund the day to day running of the state. And the projections are for continued borrowing for years to come, with a hope – it can be little more than a hope –that somehow, miraculously, the economy will return to growth. 

But with little or no sign of that desperately needed economic growth, emigration of graduates and the unemployed is about the only welfare relief the country has – and at a terrible economic and demographic cost to the future of the state.

Over the past year, 87,000 people left Ireland for countries far afield such as Australia, Canada, and the UK, countries that are now reaping the benefits of Ireland’s expensive-to-educate graduates and tradesmen.

Yet fascinatingly, as those 87,000 people leave the country to find work abroad, the number of immigrants entering the country was steady at 52,700, with 12,400 of these from non-EU countries.

This glaring anomaly of educated and skilled people leaving because of unemployment, being replaced by typically low-skilled immigrants, is not mentioned by the political class. It is mentioned on the streets of Dublin, often in great anger, but no politician will touch it. Political correctness along with the Troika now rule the Irish state.

So even in the midst of financial Armageddon, the numbers entering the country continue at Celtic Tiger levels. Ireland’s welfare entitlements are still very generous, and on any common-sense view of human nature would attract takers. And that seems to be what’s happening.

In north Dublin, for example, over half the applicants for social housing are from immigrants, with over 43 percent of the total being lone parents. While waiting to be housed, all social housing applicants receive rent allowance, with the result that over half of all residential rents in the country are now paid for by the state, or more accurately by the few remaining tax payers. 

This socialist policy of state housing support is a lucrative business. One Dublin landlord received €620,000 last year in rent subsidies. On the back of socialist welfare policies, landlords are building wealthy property portfolios - all paid for by the Irish tax payer.

One local councillor from north Dublin broke the rigidly enforced political correctness by talking about ‘welfare tourism’, but quickly back-pedalled and qualified his remark by repeating the well established liberal mantra of how Ireland ‘needs immigrants.’    

So what, if anything, is the Irish government doing about this unsustainable mess, apart from drawing lucrative salaries and gold-plated pensions? The Taoiseach (Prime Minister) Enda Kenny is paid more than David Cameron.

Economically the Troika is in charge, and the recent austerity budget - which imposed a swingeing property tax on householders, many of whom are in negative equity - was designed largely to facilitate repaying the country’s debt. The government doesn’t have much option here. It simply has to do what it is told by the Brussels apparatchiks.

The Irish political class, in effect, are reduced to being managers working for the Troika, and there’s virtually no serious political debate in the country about any alternative, such as leaving the euro and devaluing. All political parties, both left and right, give absolute and unconditional support to the euro project.

As Nigel Farage said on Irish radio a few months ago, Irish politicians are "the good boys of Europe. Brussels says jump and the Irish say how high."

Such Brussels worship is unique in the EU. In the UK for example, as in France and other EU states, there is some degree of rational opposition to the EU and to the euro single currency, and these issues often split along left and right lines. There’s no such split in the Irish body politic.

But there is one, highly contentious issue where the Irish political class has dug in and taken a stand - Irish corporation tax rate.

Ireland has one of the lowest corporation tax rates in the EU, at 12.5 percent. This makes the Irish Republic a major corporate tax haven, competing with places such as the Cayman Islands. Many large corporations, including Mit Romney’s Bain Capital Private Equity, use Ireland as a corporate base for tax purposes.

There is unanimous support for this beggar-thy-neighbour policy right across the Irish political spectrum - and for good reason. Thanks to its much resented tax haven status, Ireland pulls in large tax revenues that account for an Irish share of global profits hugely disproportionate to the size of the economy.

But the country risks becoming a pariah state over the issue. Many countries in the EU, particularly the French, are furious at Ireland’s tax haven status. They claim companies such as Google use transfer pricing - routing profits from high tax to low tax jurisdictions - that benefits Ireland and takes from the French exchequer.

With such fierce opposition, it’s difficult to see how the Irish can, in the long run, hold out against French demands for change. So even on the issue of setting its own corporation tax rate, it looks like the Irish political class will eventually have to concede to the power of Brussels. When that happens, along with closer political union, many argue there will be little need for an independent Irish parliament.

Vincent Cooper is a freelance writer

Read more on: eurosceptics in Ireland, Ireland and the eurozone, Ireland, Vincent Cooper, political correctness, Irish austerity, and Irish economy
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