By John Sepulvado
Ireland is being held up throughout Europe as the model for austerity. But what has austerity meant for the country?
(Dublin) – Before the recession of 2008, it seemed as though the Irish almost had to invent new ways to spend money. Luxury cars got more extravagant, the buildings were made more posh, and even bottled water came encrusted with a small gem on the label.
The brand, Bling H20, performed well in Ireland, selling for about $60 (US) for a pint and a half of water.
“People were happy to nearly have this as a status symbol,” says Gavan Reilly of the Journal.ie. “Like, ‘look who is drinking out of a bottle of Bling’.”
Along with fashion water, people bought up buildings, cars, horses and property.
But since the government implemented austerity measures to help pay back a 64 million euro loan, the water’s gone, many cars are unregistered as the drivers avoid paying high luxury taxes, while many buildings remain empty liabilities dragging their owners into an abyss of financial ruin.
As for the horses, some 20,000 have been abandoned since the start of the recession. They’ve been left to roam the countryside, and many of them are diseased, deformed and starving.
“Most people didn’t have any idea how to take care of horses, or the background of the horse, as long as the color was good,” says Roz Kachchhi of the group Forgotten Horses Ireland. “If the daughter wanted a bay pony with a white stripe on her nose, she got a bay pony with a white stripe on its nose. It was a new gadget to have, it was a new thing.”
In some areas, gangs of young men would round up the most crippled horses and sell them to Irish beef packers, according to David Wilson of the Northern Ireland USPCA.
“We have followed the movement of these horses,” Wilson says, “and we have seen them go through the abattior doors.”
The horsemeat scandal led to one of the largest food recalls in world history, and cost the European Union (EU) economy billions of euros.
Horse rescue groups say the government couldn’t properly police the countryside because of severe budget cuts imposed by austerity.
The Irish government has made a commitment to continue austerity for at least the next two-years as part of their agreement with the EU. To hit the benchmark of that agreement, the government will cut five billion euros from the budget for two consecutive years. The Irish budget is projected to be somewhere in the neighborhood of 150 billion euros the next year, or about 20 billion less than during the start of Austerity.
The government is also raising taxes by about 2 billion euros per year, through increases and additional revenues. Those include new income, pension and property taxes, along with a host of new fees and licenses.
Many people have begun hiding their money to avoid paying these taxes, stashing cash in offshore accounts or even in safes in the home.
Socialist TD Joan Collins says many wealthy people are especially deft at hiding income.
“It’s a natural thing that’s going to happen,” says Collins. “People are going to find ways to hide money from the tax man. And it’s going to be people that have the knowledge and the wherewithal to do that.”
Meanwhile, some 300,000 people are avoiding taxes altogether, as they’ve left the country looking for work. Many have gone to Australia and Canada.
Collins says she expects them to remain out of the country as austerity measures continue. Yet, the Irish member of parliament says the people she is truly concerned about are the unemployed (+14%), those behind in their mortgages (+40%), and the elderly who watched much of their savings disappear.
Collins says they can’t afford to emigrate to escape austerity.