It has survived occupation, wars and famine during its near 500-year existence under the motto Nolumus Mutari, “We shall not be changed”. Now, the Honorable Society of King’s Inns, which controls barristers’ entry into the Irish legal system, has seen off the EU and International Monetary Fund.
The two demanded a shake-up of the country’s legal profession as a condition of the €67.5bn bailout they supplied in 2010. Dublin promised a slate of reforms to slash sky-high fees, make it easier for consumers to get advice from barristers and set up independent oversight of the profession.
“It is vital the proposed reforms do not jeopardise the integrity of our legal system,” says David Nolan, chairman of the Bar Council, which represents barristers, most of whom trained at King’s Inns.
The delayed legal reform is but one example, according to critics, of how the structural and political changes promised by the Fine Gael-Labour coalition that has guided Ireland through the crisis have not been delivered. Vested interests continue to wield too much influence over politicians, they complain, setting up Dublin for a return to the “boom bust” culture that fuelled the crisis after the EU and IMF depart.
“The bailout treated the sick patient but didn’t tackle the underlying issues of political reform, a failure to listen to criticism and a reluctance to look elsewhere for advice,” says Donal Donovan, a member of the Irish Fiscal Advisory Council, a budget watchdog set up after the crash. “These factors were at the root cause of the financial crisis and the previous Irish fiscal crisis in the 1980s. Unless we think about this now it could happen again in 15 years’ time,” he says.
Of the eurozone countries forced by the crisis to seek bailouts – Greece, Ireland, Portugal and Cyprus – Ireland has been held up as the model student. It has been praised by the EU and IMF for meeting most of the targets in its programme. Dublin has implemented tax rises and spending cuts equivalent to 20 per cent of the value of the entire economy, cut public servants’ pay and introduced a property tax, all while maintaining social and political stability.
But the European Commission is not entirely satisfied. Its final bailout review criticises Dublin’s failure to reform its “high cost” legal system and its creaking health service, which is €350m over budget this year.
Dublin denies it is stalling, saying it is over-run with bailout demands and insists it will complete promised reforms. “We have 35,000 fewer people working in the public service, which has undergone very serious reform. The banking system has been overhauled, downsized and restructured. The central bank and entire regulatory system has been changed,” says Pat Rabbitte, Ireland’s minister for communications. “These are very serious reforms,” he says.
But critics claim the culture of cronyism that contributed to the crash is still alive and well. Five years since the financial crisis began, for example, no banker, politician or civil servant has stood trial, although Sean FitzPatrick, former chairman of Anglo Irish, is due in court next month.
“The golden circle still exists,” says Pearse Doherty, finance spokesman for the opposition Sinn Féin party. “Important information is still being hidden from public view and some firms that advised the state and banks in the lead-up to the financial crisis are being rewarded with state contracts,” he says.
Ernst & Young, which audited Anglo Irish Bank, and PwC, which audited Quinn Insurance, which both collapsed at a €31bn cost to taxpayers, have together earned €21m in fees from Nama, Ireland’s state-owned bad bank, from 2010-2013.
Expectations for reform were built up not only by the crisis but also the 2011 election that swept Fine Gael and Enda Kenny, Ireland’s prime minister, to power. That event marked the end of more than a decade of rule by the rival Fianna Fáil. So far, Mr Kenny has been forced to either drop or delay promises to strengthen parliament’s powers, amend freedom of information laws to boost transparency and open up the budget process to greater scrutiny.
“He has the largest majority in the history of the state and the strongest mandate ever received for reform but has delivered piecemeal and tokenistic changes,” says David Farrell, professor at University College Dublin.
Even in the banking sector, which bears huge responsibility for tipping Dublin into a bailout, lenders are kicking back against regulation. Last week Bank of Ireland, which is 15 per cent state-owned, publicly challenged a central bank decision that it should make more provisions for bad loans.
“The banks’ dismissive attitude to regulation hasn’t changed, as illustrated last week,” says Shane Ross, an independent member of parliament. “In the old days the banks used to sort this type of thing out over a game of golf and a nice meal. Now they don’t even bother.”
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