I.1 What is the political context of the Eurozone crisis period in Ireland? Have there been changes in government, elections, referenda or other major political events during the period of 2008-present?
Considering the depth of the economic downturn, the cuts in government spending and the dramatic rise in unemployment in Ireland since 2008 the political system has remained remarkably stable with a single change of government and limited demonstrations of popular discontent.
There have been three relevant nationwide political campaigns since the beginning of the financial crisis, the second referendum to approve the Lisbon Treaty in 2009 (‘Lisbon II’), the general election of 2011 and the referendum to approve the Fiscal Treaty in July of 2012. Outside structured political events there has been some extra-parliamentary political activity and protests. Finally much of the Government’s dealings with public sector workers has also been the focus of much political activity culminating in a comprehensive wage and productivity agreement.
A referendum to adopt the Treaty of Lisbon was held on 12 June 2008 and was rejected by 53.4% of the votes cast. Following a number of ‘guarantees’ in various forms and of uncertain legal nature the Treaty was again put before the Irish people on 2 October 2009, this time with the public voting in favour by 67.1% of the votes cast, a swing of 20.5%. A more vigorous campaign on behalf of the ‘Yes’ side, the disintegration of one of the main anti-Treaty organizations, changes in the broadcasting rules regarding referendum coverage, and the sharp downturn in the Irish economy all contributed to this change in public opinion. The importance of a positive result to economic recovery was stressed by the pro-treaty campaign. Fears regarding workers rights and the potential impact of the Treaty of Lisbon on the minimum wage were raised as issues by anti-Treaty campaigners and in particular the weak nature of the assurances that were obtained by the Irish government following the initial rejection of the Treaty. However this was vigorously contested by the ‘yes’ side.
A series of political events triggered by the entry of Ireland into a programme of financial assistance and mismanagement by the Taoiseach Brian Cowen of his coalition lead to the withdrawal of the junior party (the Green party) in early 2011 and the holding of a general election in May of that year. The terms of the bailout were a central issue in the campaign and in particular the interest rate of 5.8% was considered punitive. The two main opposition parties, Fine Gael and Labour argued for a renegotiation and a lowering of the rate which was achieved in parallel with an amendment of the terms of the Greek bailout in July of 2011. The opposition parties focused on reversing one particularly iconic measure associated with the bailout and its austerity regime, the reduction in the minimum wage, a promise that was carried out when in Government in July of 2011.
While perhaps not as widespread, frequent or intense as in other peripheral Member States the crisis in Ireland has produced a number of protests. Two general protests against austerity measures organised by the trade union movement took place in February 2009 and in November 2010 drawing up to one hundred and fifty thousand protestors. Other protests against specific policies or measures have also taken place. One of the earliest of such protests was a march by older people against the withdrawal of an automatic entitlement to a medical card (allowing for free medical services) to retired people. Three separate protests by third level students over the possibility of reintroducing third level fees took place in October of 2008, November 2010 (which turned violent at times) and in November of 2011. Students also occupied the offices of various politicians and those of the Department of Social Protection. Finally, the introduction of a ‘household charge’, a precursor to the introduction of a general property tax became an issue around which popular opposition to the government and the policy of austerity focused and drew a crowd of 5000 in Dublin. This protest took place outside the party conference (‘Ard Fheis’) of the largest government party (Fine Gael). Various other localised protests included a general protest in Donegal and at the Labour Party (the junior Government party) conference in Galway. Branches of the Occupy movement also appeared in Dublin and Cork, where a building in the city centre was occupied. In November of 2012 teachers in Dublin staged a protest against cuts in the education budget generally and more specifically regarding the pay differential between newly qualified teachers and other colleagues.
Much political comment and activity has centred on the treatment of public sector workers. During the economic boom there was an increase in the numbers employed in the Irish public service and a significant rise in wages, particularly amongst higher earners. A significant reduction in the public sector wage bill was a key condition in the Programme of Financial Assistance. After a number of unilaterally imposed cuts to wages, rises in the employee contribution to pensions and recruitment freezes the Government and the major public sector trade unions negotiated the Croke Park agreement (named after the venue where it was concluded) promising neither mandatory job losses nor further pay cuts in exchange for greater productivity and flexibility. The ‘Public Service Agreement 2010-2014’ has been a major plank in the state’s industrial relations policy and budgetary policy. The Croke Park Agreement is not a legal document but rather operates at the level of a political agreement a fact that has been confirmed by the High Court. Recently the Government has sought to replace and extend the Agreement with the Croke Park II an agreement that was initially rejected but later, after amendments, accepted by a majority of Unions.