February 21, 2009 / 5:22 PM / 10 years ago

Tens of thousands march against cutbacks in Ireland

DUBLIN (Reuters) - Nearly 100,000 people marched through Dublin on Saturday to protest at government cutbacks in the face of a deepening recession and bailouts for the banks.

Ireland's Prime Minister Brian Cowen speaks to the media following a meeting with Japan's Emperor Akihito at the Imperial Palace in Tokyo, January 16, 2009. REUTERS/Issei Kato

Ireland’s Prime Minister Brian Cowen is under pressure from Brussels and ratings agencies to squeeze a ballooning budget deficit, but plans to introduce a pension levy on public sector workers and freeze their pay has hammered his approval ratings and those of his party to record lows.

In a statement ahead of the march, the government said the measures were necessary to show international investors that Ireland was tackling its finances.

Even with spending cuts and tax hikes, the budget shortfall is forecast to hit 9.5 percent of gross domestic product this year, the worst breach of EU budget limits in the euro zone.

“Failure to show that credible start means that we impact directly and severely on our international reputation among investors and, in particular, on our capacity to raise funds and on the direct cost of servicing the borrowing which we are able to undertake,” the government said.

But in Dublin, a crowd estimated by police to be between 85,000 and 100,000 people, accused the government of leaving teachers, nurses, civil servants and construction workers with the bill for Ireland’s economic woes and letting banks and property developers off the hook.

“My family will be down 500 euros ($628.80) a month because my husband and I both work in the public sector,” said Sheila O’Shea, a primary school teacher who was also protesting at education cuts that have hit classes for special needs children.

“There is absolute burning vitriol that we feel at the savage way they have hit the most vulnerable in society.”

Posters reflected the sentiment with slogans such as “You made the most. Pay the most!” and “We won’t pay for the greed of the super rich.”

UNPRINTABLE

Pamela, a council worker, who gave only her first name, laughed when asked her opinion of the government.

“It’s unprintable,” she said. “The government measures are very annoying, particularly when you see how the banks are being protected.”

The protest, organized by Ireland’s main trade union group, comes ahead of strikes later this month and next by public sector clerical workers and bus drivers and marks a clear break in peaceful industrial relations, which had been an important contributor to the success of the “Celtic Tiger” economy.

A protracted and sharp drop in property prices, starting in March 2007, marked the beginning of Ireland’s economic decline which accelerated rapidly in late 2008 and early 2009 as job losses and falling output spread beyond the construction sector.

Public anger at the government’s handling of the economy has been exacerbated by taxpayer exposure to billions of euros in potential bad debts following the government’s nationalization of Anglo Irish Bank, the country’s No. 3 lender.

A string of scandals at Anglo have undermined Ireland’s international reputation and rattled Cowen’s government.

Extracts of a report by PricewaterhouseCoopers late on Friday revealed that the bank was exposed to a small number of property developers, some of whom were likely to face major losses as the Irish property market keeps unraveling.

Around 15 customers each have 500 million euros worth of loans with Anglo and under a high stress scenario the lender could face impairment charges of 2.3 billion euros in its 2009 financial year and 3 billion euros in 2010.

Editing by Katie Nguyen

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