2008: Cowen government Following the May 2008 appointment of
Brian Cowen as
Taoiseach, the ruling
Fianna Fáil party had been polling close to their 41% levels of the
2007 election but the party began to fall in the polls from September 2008. Their support fell to third place for the first time ever behind both leading opposition parties in a national opinion poll published in
The Irish Times on 13 February 2009, polling only 22%. A 27 February poll, indicated that only 10% of voters were satisfied with the Government's performance, that over 50% would like an immediate general election. They gained about 24% of the vote in the June 2009 local elections and continued to languish as the crisis intensified during the remainder of the year, reaching a new low of 17% support in September 2009. During the 2009/2010 period opposition calls for an early election intensified and some of their own TDs resigned from the party supporting the calls and reducing the Government majority to single digits. The Government was urged by the courts to hold a long-delayed Donegal South by-election. By December 2010, following the IMF intervention, their support reached a further record low of 13% and their coalition partners, the Green Party, announced that they would withdraw support from Government in January 2011 once the 2011 budget had been passed. The Government announced that an election would take place in Spring 2011 but the intended date had to be brought forward to 25 February 2011 following a widely criticised cabinet reshuffle. Taoiseach Cowen was replaced as party leader by
Micheál Martin. At the election, Fianna Fáil received 17% of the vote and their seats collapsed from 71 outgoing to a record low of 20. The Fine Gael and Labour opposition secured record seat gains but no overall majority and formed a coalition government.
Government emergency budget of October 2008 Ireland officially declared it was in a recession in September 2008. Before this declaration, the Irish government announced, on 3 September 2008, that it would bring forward the 2009 government budget from its usual December date to 14 October 2008. In a statement, the government claimed that this was largely due to a decrease in the global economy. The budget, labelled "the toughest in many years", included a number of controversial measures such as a proposed income levy which was eventually restructured, and the withdrawal of previously promised
HPV vaccines for schoolgirls. Other results of the budget included a new income levy being imposed on all workers above a specified threshold and the closure of a number of military barracks near the border with
Northern Ireland. An unexpected public outcry was invoked over the proposed withdrawal of medical cards and the threatened return of university fees. A series of demonstrations ensued amongst teachers and farmers, whilst on 22 October 2008, at least 25,000 pensioners and students descended in solidarity on the Irish parliament at
Leinster House,
Kildare Street,
Dublin. Some of the pensioners were even seen to cheer on the students as the protests passed each other on the streets of Dublin. Changes to education led to a ministerial meeting with three
Church of Ireland bishops who were assured by O'Keeffe that religious instruction would be unaffected by the budget changes. Rebellion within the ranks of the ruling
coalition government led to a number of defections of disenchanted
coalition members.
County Wicklow TD,
Joe Behan resigned from the Fianna Fáil party in protests at the proposed medical card changes after suggesting that past
taoisigh Éamon de Valera and
Seán Lemass "would be turning in their graves at the decisions made in the past week".
Independent TD
Finian McGrath then threatened to withdraw his support for the government unless the plan to remove the overs 70s automatic right to a medical card was withdrawn completely.
Taoiseach Brian Cowen postponed a planned trip to
China, sending
Minister for Education and Science Batt O'Keeffe ahead to lead the delegation. Behan, alongside McGrath and former government minister
Jim McDaid, later voted against his former colleagues in two crucial
Dáil votes on medical cards and cancer vaccines. These defections reduced the Irish government's majority of twelve by one quarter. A
supplementary budget was delivered in April 2009 to address a fiscal shortfall of over €4.5 billion.
Bank guarantee On 29 September 2008 the government issued a 2-year unlimited guarantee of all debt (the Credit Institutions Financial Stabilisation Act, or CIFS guarantee) in favour of 6 banks. The comprehensive and unlimited scope of the Irish
fait accompli surprised other governments, the ECB and the
European Commission at the time. There was an immediate response in the markets, with short term money market funds returning to Ireland, mainly from the UK.
Lorenzo Bini Smaghi, member of the ECB Executive Board, later said, "The ECB learned about the issue and we found it was very surprising that a country comes out by itself – even in a situation in which the Irish were in, with a large banking system – to guarantee everything. It was surprising… It was surprising that someone would embark on blanket guarantee by itself. It was a dangerous gamble." The CIFS "blanket guarantee" of Irish domestic banks covered debts estimated at €440 billion at the start. It covered all debts of the 6 banks protected, was non-renewable, and was never called on. As such, the guarantee itself did not directly cost the State anything—and since the protected banks paid levies in exchange, it can technically be described as having made money. However, preventing the guarantee from being called on committed the Irish government to preventing the collapse of any of the participating banks, which would have resulted in the calling on of the guarantee at a time when the banks had large debts, bank assets were of little value for lack of buyers, and the government's finances were already under heavy strain. The CIFS blanket guarantee was never renewed. An ancillary guarantee, the Eligible Liabilities Guarantee, was passed in 2009. This second guarantee scheme applied only to specified new debt (but applied to that debt until maturity), and was renewable on a six-monthly basis. It is this second guarantee that was renewed several times after the expiry of the CIFS guarantee.
Comment by the American embassy Despite the bank guarantee in September, by December 2008 the American ambassador was reporting to Washington that no clear plan was in place, after an interview with John McCarthy of the Irish
Department of Finance and two other officials. McCarthy was quoted as saying that "forecasting anything in the current uncertain environment is almost impossible" and that the government could "only react given the fast pace of the downturn". The interview was published in 2011 as a part of the
United States diplomatic cables leak.
2009: NAMA, strikes and industrial unrest against the government's response to the
2008 financial crisis, 2009
Sit-ins and strikes On 5 January 2009,
Waterford Wedgwood entered receivership. On 30 January, workers at the
Waterford Crystal plant in
Kilbarry were told they would be losing their jobs. A statement issued by the receiver, Deloitte's David Carson, confirmed that, of the 670 employees, 480 of them would be
laid off. A meeting held the following day did little to resolve the conflict, with the sit-in continuing for almost two months until 22 March. On 18 February 2009, 13,000 civil servants voted for industrial action over a proposed pension levy. They effected this action on 26 February. Days earlier, as many as 120,000 people, had protested on the streets of
Dublin on 21 February. This was followed by a further march through the capital by
gardaí on 25 February and a lunch-time protest by 10,000 civil servants on 19 March 2009. This was followed by two separate taxi drivers' protests in Dublin on 20 March 2009. Labour leader Eamon Gilmore said at the time that a national strike would serve the country no good.
National Asset Management Agency In April 2009, the government proposed a
National Asset Management Agency (NAMA) to take over large loans from the banks, enabling them to return to normal liquidity to assist in the economic recovery. NAMA's first appraisal was in September 2009, fortuitously timed just before the issue of the second one-year bank guarantee.
Increasing debt spiral The costs of the bank rescues, NAMA and government deficits over the period look set to push Irish National Debt up to a ratio of 125% of GDP by 2015. However, there have been several misleading estimates of debt statistics relating to the
Post-2008 Irish economic downturn. Ireland, like Luxembourg, is home to a disproportionately large number of international financial services providers. Many statistical calculations include the debts of all banks located in Ireland without separating foreign owned banks from Irish banks. The liabilities of the Irish banks represent a figure equivalent to approximately 309% of GDP, the third highest in the EU.
Croke Park Agreement The Irish Government and Irish Public Sector unions, including
IMPACT, negotiated the
Croke Park Agreement which provided for increased productivity, flexibility and savings from the public sector in exchange for no further pay cuts, and no lay offs.
2010: Bank bail-outs and protests Economic Adjustment Programme for Ireland in 2011 In April 2010, following a marked increase in Irish 2-year bond yields, Ireland's
NTMA state debt agency said that it had "no major refinancing obligations" in 2010. Its requirement for in 2010 was matched by a cash balance, and it remarked: "We're very comfortably circumstanced". On 18 May the NTMA tested the market and sold a €1.5 billion issue that was three times oversubscribed. By September 2010 the banks could not raise finance and the bank guarantee was renewed for a third year. This had a negative impact on Irish government bonds, government help for the banks rose to 32% of GDP, and so the government started negotiations with the
ECB and the
IMF. On the evening of 21 November 2010, the then
Taoiseach Brian Cowen confirmed that Ireland had formally requested financial support from the
European Union's
European Financial Stability Facility (EFSF) and the
International Monetary Fund (IMF), a request which was welcomed by the
European Central Bank and EU finance ministers. The request was approved in principle by the finance ministers of the
eurozone countries in a telephone conference call. Details of the financial arrangement were not immediately agreed upon, and remained to be determined in the following weeks, though the loan was believed to be in the region of €100 billion, of which approximately €8 billion was expected to be provided by the United Kingdom. the
Green Party leader
John Gormley signalled that his party would seek a general election in January 2011, with the implicit threat being that they would pull out of Government; with the addition of a number of Independent government TDs declaring that they would not continue to support the Government and speculation mounting,
Brian Cowen called a press conference in which he announced that the Government intended to introduce and pass that year's Budget, and its constituent parliamentary bills, before having the
2011 election. However, on 23 November, rebel members of Brian Cowen's ruling
Fianna Fáil party and opposition leaders sought no-confidence vote for the Government and dissolution of the
Oireachtas before a crucial budget vote on 7 December 2010, that should open the way for adopting the rescue package. On 28 November, the
European Union,
International Monetary Fund and the Irish state agreed to an €85 billion rescue deal made up of €22.5 billion from the IMF, €22.5 billion from the
European Financial Stability Facility (EFSF), €17.5 billion from the Irish sovereign
National Pension Reserve Fund (NPRF) and bilateral loans from the
United Kingdom,
Denmark and
Sweden. Eurogroup President
Jean-Claude Juncker said that the deal includes €10 billion for bank recapitalisation, €25 billion for banking contingencies and €50 billion for financing the budget.
Protests against austerity 2010 saw several notable protests against austerity in Ireland.
2011: Government collapse Collapse of the Cowen government On 6 February 2011, it was revealed that Ireland had received a first €3.6 billion of the rescue package from the EFSF. This is a slightly higher amount than was previously expected mostly due to the better than expected auction of the EFSF bonds in January 2011. Later that month the coalition government of Fianna Fáil and the Green Party lost the
2011 general election and were replaced by a coalition made up of
Fine Gael and the
Labour Party. In April 2011, despite all the measures taken,
Moody's downgraded the Irish banks' debt to
junk status. Debate continues on whether the
new government will need a "second bailout". By August 2011 the largest of the six state-guaranteed banks, Bank of Ireland, had a
market capitalisation of €2.86 billion, but loans to the six by the ECB and the Irish Central Bank were about €150 billion. Consumer research by British discount retailer
Poundland found that the term "eurozone" had negative associations. When expanding to the Republic in 2011 the company branded its stores as "
Dealz", despite the CEO stating that "Euroland" would be "the obvious choice".
Student actions As the year went on students became increasingly concerned about the honesty and integrity of the pledge signed by
Ruairi Quinn before the election that the Labour Party would oppose increased tuition fees. A small group also engaged in a sit-down protest outside the Fine Gael office on Dublin's Upper Mount Street. At around 16:00 on 29 November 2011, three student union presidents (of Galway-Mayo Institute of Technology, University College Cork and IT Carlow) under the leadership of Union of Students in Ireland (USI) President Gary Redmond occupied a room at Department of Social Protection on Dublin's Store Street as part of a continued effort to have the Labour Party clarify its position on tuition fees. Gardai broke down the door of the room in which they were stationed and led them away. Ten student union presidents also attempted to occupy a room at the Department of Enterprise on Kildare Street for the same reasons. Nine students, also seeking clarification on the government's view on third-level fees, participated in a peaceful sit-down protest by occupying the constituency office of Fine Gael TD and former mayor
Brian Walsh in Bohermore, Galway, around midday on 30 November 2011. They unfurled a banner on the roof with the message, "FREE EDUCATION NOTHING LESS". They were imprisoned by the police and released a short time later. On 2 December 2011, eight students from the
National University of Ireland, Maynooth (NUIM), including the university's student union president Rob Munnelly, began occupying the
Naas constituency office of Fine Gael TD
Anthony Lawlor. They did so with sleeping bags, clothes, a chemical toilet and a week's supply of food and were supported by other students on
Facebook and
Twitter. During the occupation Munnelly debated with Lawlor live on
Kildare TV, USI President Gary Redmond visited the revolting students and a banner with the slogan "SAVE THE GRANT" was erected at Lawlor's entrance.
Other protest actions outside Leinster House on 6 December 2011 The closure of the Accident & Emergency Department at Roscommon hospital led to continued protests by the
Roscommon Hospital Action Committee.
Occupy Dame Street began on 8 October 2011, a Saturday afternoon. On 26 November 2011, thousands of people marched against austerity in Dublin. On 1 December 2011, Roscrea District Court solicitors staged a walkout over the courthouse's closure. Hundreds of people from
County Donegal converged on
Buncrana on 3 December 2011 to protest against austerity and to tell the government that "
Inishowen and Donegal says no to further cuts and austerity". The
Vita Cortex sit-in began in Cork on 16 December 2011. There was also rebellion within the ranks of government. On 15 November 2011,
Willie Penrose resigned as
Minister of State for Housing and Planning due to his opposition to the Government's decision to close the army barracks in
Mullingar. He also resigned the Labour parliamentary party whip.
Tommy Broughan TD was expelled from the Labour Party on 1 December 2011 after voting to reject a government amendment to extend the bank guarantee for another year. Later that month,
Patrick Nulty, another Labour TD, also voted against the government.
2012: Occupy and Fiscal referendum In January 2012, Taoiseach Enda Kenny denied Ireland would need a second bailout but admitted "very significant economic challenges" were ahead.
Industrial action The
Vita Cortex sit-in continued in Cork. On 27 March, 2,104 jobs were lost as video games retail company
Game closed 277 stores. Staff began a sit-in.
Occupy camp in Dublin.
Occupy Dame Street continued in Dublin. In January,
Occupy Cork occupied a building in the city, while
Occupy Belfast took over the
Bank of Ireland in the city.
Protests While attending a buffet at a
Letterkenny hotel on 24 February 2012, Transport Minister
Leo Varadkar was heckled and booed by local residents who repeatedly shouted "Shame on you" at him. On 25 February 2012, demonstrators protesting against the downgrading of schools in
Bunbeg,
County Donegal, marched on the office of their local TD, Fine Gael Junior Minister
Dinny McGinley. There were also protests in
County Mayo on the same day. On 31 March, Ireland was reported by international media to be facing a popular revolt after government figures indicated less than half of the country's households had paid the new property tax by that day's deadline as thousands of people from across the country marched on the governing Fine Gael party's Ard Fheis at the
Convention Centre Dublin. The previous evening, Justice minister
Alan Shatter was involved in controversy after telling those who objected to the government's Household Charge to "get a life", remarks made on his way into the Fine Gael annual conference at the Convention Centre. In April 2012, the ruling
Labour Party held its centenary conference in the Bailey Allen Hall at
NUI Galway. Gardaí used
pepper spray to hold back anti-austerity demonstrators after they broke through a Garda barrier while protesting against government. In October 2012, the ministerial car of Tánaiste Eamon Gilmore was subjected to eggings and kickings by protesters against cuts in Dublin.
Referendum on Fiscal Stability Treaty In 2012 the government sought to ratify the
Treaty on Stability, Coordination and Governance in the Economic and Monetary Union. The
Attorney General advised that a referendum was required to ensure consistency with the
constitution. Consequently, the
Thirtieth Amendment of the Constitution of Ireland was passed on 31 May with 60.3% in favour on a turnout of 50%. This enshrined the Fiscal Treaty into Article 29 of the constitution.
2013: IBRC and bailout exit Liquidation of IBRC On the night of 6–7 February 2013, the
Irish Bank Resolution Corporation (IBRC) was dramatically liquidated after the Fine Gael/Labour coalition passed emergency overnight legislation through the
Oireachtas while
President Michael D. Higgins was flown home from the three-day official visit to
Italy upon which he had embarked that very morning. This was the night before the
Irish Supreme Court was due to hear an appeal by a Dublin business man, David Hall, against the High Court's ruling that he did not have the standing or
locus standi to challenge the legality of the €3.06 billion promissory note payment that was due at the end of March. Hall's original argument before the High Court was that the payment of the €31 billion in promissory notes in respect of the now defunct Anglo Irish Bank was illegal as their issuing in 2010 was not approved by a Dáil vote. Every IBRC employee had their employment terminated with immediate effect, with many learning of this as it was announced on national television station
TV3. The proposed legislation eventually passed in the Dáil by 113 to 35 at 03:00. In
Seanad Éireann it passed by 38 to 6.
President Michael D. Higgins rushed home from his visit to
Rome and signed the Irish Bank Resolution Corporation Bill 2013 into law at
Áras an Uachtaráin early on 7 February 2013. The Opposition criticised the suddenness with which the legislation was rushed through. Many deputies did not have time to read it. The range of opposition TDs critical of it included
Joe Higgins,
Catherine Murphy,
Richard Boyd Barrett,
Luke 'Ming' Flanagan,
Mick Wallace,
Thomas Pringle and
Mattie McGrath. Ireland's mainstream media overwhelmingly supported the legislation, though
Vincent Browne called it "lunatic stuff" on TV3. The 8 February edition of
The Irish Times contained a section dedicated to the issue, which was described as resembling "a press release from the Department of Finance". On 17 February 2013, the Chief Financial Officer of Anglo Irish Bank, Maarten van Eden, tendered his resignation writing that "
I have no confidence whatsoever in the ability of government to do the right thing for the financial sector." and describing the government's actions on the promissory note as "
pure window dressing".
Exit from bailout Ireland officially exited the Troika bailout in December 2013. Taoiseach
Enda Kenny gave an address to mark this official end, in which he said the country was moving in the right direction and claimed the economy was starting to recover. Commentators, including
Gene Kerrigan and
Vincent Browne, questioned its significance to the Irish economy, and many viewed it as a cosmetic public relations exercise. On 13 March 2013, Ireland managed to regain complete lending access on financial markets, when it successfully issued €5bn of 10-year maturity bonds at a yield of 4.3%. After having ended its bailout programme as scheduled in December 2013, there was no need for additional bailout support.
Signs of recovery since 2014 After the bailout exit, the economy started to recover, recording growth of 4.8% in 2014. National debt fell to 109% of GDP and the budget deficit fell to 3.1% in the fourth quarter of 2014. However, opinion polls for the Fine Gael-Labour coalition in 2014 showed that approval ratings for government policies continued to drop and after numerous allegations of Gardaí malpractice resulted in the Minister for Justice Alan Shatter resigning and Taoiseach Enda Kenny awarding himself the office of Minister of Defence. As well as this the Government had formally established
Irish Water, a company to charge people for water usage and had begun to install water metres in front of every property across the country, which caused huge controversy and protest throughout Ireland. During 2015, unemployment fell from 10.1% to 8.8%, while the economy grew by an estimated 6.7%. In November 2015, it was reported that exchequer receipts were €3 Billion ahead of target and that the government's tax revenues had risen by 10.5% throughout 2015. During 2015, Fine Gael rose in the opinion polls, while their coalition partner Labour struggled to rise above 10%. In 2016 there was significant attention on the accuracy and reliability of figures that indicated economic recovery. CSO figures—which seemed to indicate that Irish GDP rose by 26.3 per cent year-on-year 2015 to 2016—were acknowledged as being skewed by the profits of a small number of multinationals and some shell companies. The term "Leprechaun economics" was coined to describe this phenomenon. In 2017, the Anti-Austerity Alliance renamed itself
Solidarity to shift its focus away from the economy. ==See also==