Failing to learn harsh lessons from history

On Tuesday’s Irish Examiner, it was reported that Ewald Nowotny who is a member of the ECB Governing Council had stated that European policymakers must avoid repeating a “single-minded” focus on austerity that helped bring the Nazis into power in the 1930s German economic crisis.

He added that this policy led to mass unemployment, a breakdown of democratic systems and in the end, the catastrophe of Nazism.

Surely this is another lesson from history we ignore at our peril? Certainly others are taking it seriously as far as Greece is concerned.

Prior to last Sunday’s election, Greeks were reported to be withdrawing over €800m per day from Greek banks. Now that the die is cast and pro-euro, aka pro-austerity, parties have won enough seats together to talk about forming a coalition, there should at least be some short-term calm.

However, an ultra-left party won around 25% of the vote, and will be a major thorn in the side of any coalition government. Austerity will continue to be a major issue.

So it should be no surprise that Greek and foreign companies are taking steps to protect their assets in Greece. British electrical goods retailer Dixons is reported to be stockpiling security shutters to protect its almost 100 shops across Greece. It learned the hard way from the riots in London in 2011 and does not want them repeated.

Other companies are reported to be taking similar steps. Do we really think we are immune from what is happening there?

To many in Ireland it remains business as usual, particularly for those in the sheltered sectors, in government, the broader public sector and discrete parts of the private sector. However, for hundreds of thousands of people, the current austerity measures are biting hard. Unfortunately, if recent reports are correct, austerity is due to bite even harder.

Government claims that it is seeking to lessen the amounts that must be paid back to Europe. However, lessening the amount, when full repayment still remains the intent, means the pain will continue even longer.

Cuts across the board are the order of the day. For instance the Department of Social Protection apparently intends to base its future pension policy on a soon to be published OECD report.

Research undertaken by the Trusted Adviser Group has suggested that cuts of up to 50% to the value of the State’s old age pension are inevitable.

The money we save ourselves directly or through pension schemes will not amount to much when we retire and while we paid into the exchequer for our working lives on the expectation of an old age pension to supplement whatever we have saved, we are being told it will be halved from its current inadequate levels.

Paying politicians “upset” money when they lose their seats and then having the cheek to tell pensioners who have been paying into the exchequer all of their lives that from 2014, those born in 1949 are just going to have to wait another year before they get anything is insult heaped on insult. And it does not stop there.

All sorts of stealth taxes are being levelled on us to pay European banking debts whilst at the same time public servants are being paid incremental increases.

Government decides pay levels for its advisers and then promptly ignores its own recommendations to pay the favoured among them way over the odds. It’s not good example. It’s the antithesis of patriotism.

It’s a case of “do as I say and not as I do” writ large. However, we will rue the day we fail to see what happens when folk are driven too far.

People need jobs; people need hope; people need a future.

Austerity on its own is not the answer. It has never worked on its own and it will not work now.

* business@examiner.ie

More in this section

Lunchtime News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Discover the

Install our free app today

Available on

Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up