When banks cannibalize the state: responses to Ireland’s economic collapse

Abstract

Following the seeming dramatic success of the years of the Celtic Tiger boom (1994-2007), the even more dramatic collapse of the Irish banking system since 2008 has, as stated by senior Labour politician Pat Rabbitte, a former party leader and currently Minister for Communications, Energy and Natural Resources, come to threaten the solvency and stability of the Irish state itself. Not only has this led to a significant breakthrough for the left in the February 2011 general election, but it has raised serious questions about the sustainability of the extreme free-market road to development followed by successive Irish governments. As a member of both the European Union (EU) and the euro zone, the Irish crisis furthermore threatens the cohesion of the Union and the longer term viability of the common currency. After decades when free-market capitalism seemed unassailable, Ireland is showing the economic and social cost of promoting the market as the motor and arbiter of what constitutes development. From being the poster child of success in the era of globalization, Ireland has now become a warning signal.