The collapse of Lehman Brothers investment bank in the United States in 2008 signalled what has arguably become the world’s deepest recession since the Wall Street crash of 1929. And this has been a truly global economic downturn, with rich as well as poor countries, facing into a headwind of austerity and unemployment. For instance, the International Labour Organisation (ILO) has just released a report which found that unemployment has risen in two-thirds of European countries since 2010 as growth has flat-lined and employment opportunities dried up.
The economic slowdown has arguably been most pronounced in Western economies tied to strident forms of neoliberalism that have asserted the power of markets to generate growth and ‘raise all ships’ in a general sea of prosperity. No Western European country embraced the neo-liberal model more than Ireland, which from the late 1990s to 2007, was lauded as an economic tyro dubbed the ‘Celtic Tiger’. The Celtic Tiger was driven by inward investment by multinational corporations, mostly from the US, engaged in production for export markets in growth sectors like information technology. However, a combination of lax regulation of the financial sector, a low tax regime for investors, a credit bubble in the housing market and a corrupt political class in league with bankers, speculators and builders saw Ireland’s economic miracle turn to dust. Ireland’s worst economic fears were realised when, in 2010, it agreed an €85 billion loan from the International Monetary Fund and European Central Bank to recapitalise its banks. What was once the ‘poster child for neo-liberalism’ was recently described by David Begg, General Secretary of the Irish Congress of Trade Unions, as the ‘poster child for austerity’.
