This is an article detailing Ireland's current economic recession and the impact it has had on that country. For the series of banking scandals which the country is currently experiencing, see 2008–2009 Irish banking crisis.

The 2008–2009 Irish financial crisis is a major ongoing economic crisis in Ireland that is in part responsible for the country falling into recession for the first time since the 1980's. The country officially announced it was in recession in September 2008, with a sharp rise in unemployment occurring in the following months. Ireland was the first country in the Eurozone to enter recession as declared by the Central Statistics Office^[1].

The numbers of people claiming unemployment benefit in Ireland rose to 326,000 in January 2009, the highest monthly level since records began in 1967.^[2] Amidst the crisis, which has coincided with a series of banking scandals that have destroyed public confidence in the financial sector, the ruling Fianna Fáil party fell to third place in an opinion poll conducted by The Irish Times. The party placed behind Fine Gael and Labour, the latter of which rises above Fianna Fáil for the first time in history.

The weakening conditions drew 120,000 protestors, including members of the armed forces and police, onto the streets of Dublin on 21 February 2009, amidst further threats of protests and industrial action. On 24 February, Dublin's ISEQ index fell over 3% to stand at 1,987, a 14-year low.^[3] The last time it stood under the 2,000 level was the middle of 1995.^[3] This occurrence followed the unexpected resignation of former Anglo Irish Bank director Anne Heraty from the board of the Irish Stock Exchange the night before.^[4]

Crises of confidence (2008)

Budget cutbacks

Ireland officially declared it was in a recession in September 2008. Prior to this declaration, the Irish government announced, on 3 September 2008, that it was to bring forward the 2009 government budget from its usual December date to 14 October 2008.^[5] In a statement, the government claimed that this was largely due to a decrease in the global economy.^[6] The budget, labelled "the toughest in many years"^[7], included a number of controversial measures such as a proposed income levy which was eventually restructured,^[8] and the withdrawal of previously promised HPV vaccines for schoolgirls.^{[9][10][11][12][13]} 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.^{[14][15][16][17][18]}

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,^{[19][20][21][22][23][24]} whilst on 22 October 2008, at least 25,000 pensioners and students descended in solidarity on government buildings at Leinster House, Kildare Street, Dublin.^[25] Some of the pensioners were even seen to cheer on the students as the protests passed each other on the streets of Dublin.^[26] Slogans such as "no cutbacks, no fees, no Fianna Fáil TDs" and "education is a right not a privilege" have since become commonplace in student protests against the government organised by the Union of Students in Ireland (USI) and the newly-formed Free Education for Everyone (FEE), as have puns on the Minister for Education and Science Batt O'Keeffe.^[27][28] Changes to education led to a ministerial meeting with three Church of Ireland bishops^[29] who were assured by O'Keeffe that religious instruction would be unaffected by the budget changes.^[30]

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".^[31] Independent Deputy 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.^[32] Taoiseach Brian Cowen postponed a planned trip to China, sending Minister for Education and Science Batt O'Keeffe ahead to lead the delegation.^[33] Behan, alongside McGrath and former government minister Jim McDaid,^{[34][35][36][37]} 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 is expected in April 2009 to address a fiscal shortfall of over €4.5 billion.^[38]

Pork crisis

In late 2008, a crisis over the safety of Irish pork occurred when the Food Safety Authority of Ireland ordered the international recall, withdrawal and destruction of all Irish pork products dating back to 1 September. It was announced that "dioxins & dioxin like PCBs", a group of highly toxic synthetic halogenated organic compounds, had been discovered in pork at levels between 80 and 200 times the European Union's recommended safety limits.^[39][40] The Irish general public were advised to destroy all their purchased pork products as Ireland's Department of Agriculture and the Food Safety Authority initiated an investigation.^[41] Contaminated feed was used at as many as forty-six farms in the Republic of Ireland of which thirty-seven raised cattle for beef and nine produced pork.^[42] Additionally, contaminated feed was used on eight cattle farms in Northern Ireland.^[43]

Within two days of the announcement, 1,800 jobs were lost in the Irish pig industry^[44] with a further 6,000 jobs said to be at risk by Ireland's largest trade union SIPTU. Ireland's largest pig meat processor, Rosderra Irish Meats Group Ltd., turned away all of its 850 employees at four plants on 8 December, telling them to sign up for state unemployment benefits.^[45] Pork industry workers protested outside Leinster House in Dublin, as SIPTU organised a demonstration citing "delays in resuming production" and the financial "dire straits" some workers are in as their reasons.^[46] Processors halted the slaughtering of pigs until the Irish government promised them financial reparation.^[47] 100,000 pigs were threatened with being slaughtered^[48] and the estimated costs of the crisis stood at €100 million within two days.^[49]

The crisis was given extensive media coverage across the globe. Within twelve hours of the pork recall announcement, the international press was carrying the story and within thirty-six hours there were over 1,700 newspaper articles on the crisis globally.^[50] Tabloid The Sun announced the story as "Toxic Irish pork is swept off shelves" whilst the Daily Mirror opted for "Poison pork panic: Irish pigs were fed on plastic bags". Daily Express ran the story under the banner headline "Shoppers told: Don't eat toxic Irish pork" and the Daily Mail went with the headline "British shoppers 'may not be able to tell whether they have Irish poison pork in their fridge'". The Times had the headline "Shops rush to take Irish pork off shelves", warning that EU labelling laws meant pork originating in Ireland could have been labelled as British. Le Monde had the top-five most e-mailed website headline "Dioxin alert in Irish pork" and The Straits Times website had the crisis as its second most popular story. El País reported its concern that contaminated meat might have arrived in Spain via France and Portugal. The New York Times, under the headline "Ireland investigating tainted pork" and The Washington Post, under the headline "Ireland recalls pork products after dioxin test", covered the story in their own short ways. AFP had the headline "Ireland scrambles to contain pork cancer scare" and the Xinhua News Agency was one of the earliest news agencies to follow the story with headlines including "Irish police to investigate pork contamination". CNN tagged the story as "another red flag being waved over dinner tables this week with warnings from the Irish government not to eat its pork products", comparing the crisis to bovine spongiform encephalopathy, bird flu and the 2008 Chinese milk scandal.^[50]

The pork industry is the fourth biggest in Ireland's agriculture sector, worth around €400 million per year to the Irish economy. The country's farms produce over 3 million pigs per annum, almost 50% of which are consumed within the Republic.^[51] The remainder is exported, heavily to the neighboring territories of Northern Ireland and Britain, but it also features in grocery stores and processed meats throughout two continents - Europe and Asia. In 2007, Ireland exported 113,000 tons of pig meat, nearly half of which went to the United Kingdom. Over 500,000 live pigs were also shipped to the UK for slaughter and processing in that country. Ireland's other major customers of its pork are Germany, the buyer of 9,000 tons in 2007; France, Italy and several countries within the boundaries of Eastern Europe, which together purchased over 20,000 tons, Russia, the buyer of 6,600 tons, and China, which came into the ownership of 1,100 tons.^[52]

Strikes and industrial unrest (2009)

Waterford Crystal sit-in

On 5 January 2009, Waterford Wedgwood entered receivership.^[53] 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.^[54] The workers responded angrily to this unexpected decision and at least 100 of them began an unofficial sit-in in the visitors' gallery at the factory that night.^[54] They insisted they would refuse to leave until they had met with Carson.^[54] Following the revelations, there was a minor scuffle during which the main door to the visitors' centre was damaged.^[54] Local Sinn Féin Councillor Joe Kelly was amongst those who occupied the visitors' gallery.^[54] A meeting held the following day did little to resolve the conflict,^[55] with the sit-in continuing for almost two months until 22 March.^[56]

Government approval ratings

The ruling Fianna Fáil party fell to third place in a national opinion poll published in The Irish Times on 13 February 2009.^[57] The party placed behind Fine Gael and Labour, the latter of which rose above Fianna Fáil for the first time in history.^[58] A further opinion poll, published in the Irish Independent on 27 February, indicated that only 10% of voters were satisfied with the Government's performance, that over 50% would like an immediate general election and confirms the sudden collapse in support for Fianna Fáil.^[59]

Public demonstrations

On 18 February 2009, 13,000 civil servants voted for industrial action over a proposed pension levy.^[60] They effected this action on 26 February.^[61]

Days earlier,as many as 120,000 people, including members of the armed forces and police, had protested on the streets of Dublin on 21 February.^[2][62] This was followed by a further march through the capital by gardaí on 25 February^[63] and a lunch-time protest by 10,000 civil servants on 19 March 2009.^[64] This was followed by two separate taxi drivers's protests in Dublin on 20 March 2009.^[65]

Teachers participated in a one-day national strike organised by the Irish Congress of Trade Unions (ICTU) on March 30th 2009 after three teachers’ unions voted to join the strike action on 13 March.^[66] Those participating are Irish National Teachers' Organisation (INTO), the Association of Secondary Teachers Ireland (ASTI) and the Teachers' Union of Ireland (TUI), the three of which represent approximately 60,000 teachers nationally.^[66] Labour leader Eamon Gilmore has stated his belief that a national strike would serve the country no good.^[67]

See also

• National Asset Management Agency

References