ANALYSIS-Ahead of others, Irish spending cuts start to bite

Thu May 27, 2010 11:06am BST

* Ireland cuts already biting

* Hospital waiting times rising

* Disabled and elderly vulnerable



By Peter Apps, Political Risk Correspondent

DUBLIN, May 27 (Reuters) - "Greed is the knife," says the fresh blood red, white and black graffiti confronting the visitor leaving Dublin's ferry terminal. "The scars run deep".

From rising hospital waiting times to slashed public sector wages and the rising prospect of young disabled people being institutionalised against their will, Ireland's austerity measures are beginning to bite.

Their impact could be a clue to what Britain, Portugal, Spain and others can expect as they begin the same process.

Since the debt-fuelled "Celtic Tiger" collapsed into near national bankruptcy, Ireland has led the rest of Western Europe in cutting public spending, earning praise from investors now demanding similar steps from others.

"You are already seeing a real impact," says Michael Doyle, paralysed by a spinal-cord injury and working as a regional director for the Irish Wheelchair Association. "There is obviously much less money in the system, and our belief is it is clearly going to get worse."

Public sector pay has been the biggest casualty -- cut 5 to 15 percent in a December budget, with more potentially to come. That has left many public servants struggling to pay off mortgages on houses no longer worth what they paid for them, but has not in itself reduced public services.

Social unrest has been relatively light: a couple of large-scale protests, occasional sometimes violent small-scale evening marches in Dublin and a public sector strike last year. Few expect clashes on the scale of those in Greece.

"Ireland is seen as having done better than most others in restoring market credibility," said Eurasia Group analyst Jon Levy. "There are still some worries -- particularly with the banking sector -- but the feeling is they have done better than most and with a reasonable degree of internal consensus."

Ultimately, Ireland's trade unions say they know deficit reduction is vital if Ireland is not to be priced out of international bond markets like Greece, but want a greater burden to be paid by the rich through higher taxes.

Head of the trade union congress Jack O'Connor told Reuters last week widespread labour unrest might ultimately do more harm than good through panicking foreign lenders -- but would not rule it out if further wage cuts followed. [ID:nLDE64I135].

Analysts have long warned that cutting public spending will inevitably prompt every interest group -- from pensioners to generals -- to fight to make sure the knife goes somewhere else.

Ireland is no exception. Thousands of elderly took to the streets last year to protest suggested cuts to free medical care for the over 70s. The government backed down on that issue, but has said it cannot rule out pension cuts although there have been none so far.



"NO ONE HUGE AXE"

"It is not that there is one huge axe which has fallen but there are a range of smaller cuts that altogether add up to a big deal," said Dermot Kirwan, spokesman for Irish charity Friends of the Elderly. "Waiting times for hospital procedures have gone up, elderly people are in hospital longer waiting for home care funding, some of the smaller benefits have been cut. The lesson is you have to band together. "

Nevertheless, some improvements are being made in areas where spending has been ringfenced.

The cancer budget will increase to 56 million euros from 36 million in 2009, including funding for new bowel cancer screening programmes -- although to save money the new services will be provided from within existing older hospital buildings.

"The continued rollout of screening programmes means fewer people should die unnecessarily of cancer despite the cuts," said Irish Cancer Society head of advocacy and communications Kathleen O'Meara. "During the boom, they would probably have been put in shiny new centres that ministers would have opened. There are always efficiencies and savings to be made in any system."

But she says cancer patients will see reduced services in other areas of healthcare and worries particularly about what will happen when departing workers are not replaced.

"It could mean that services get very patchy and planning gets difficult", she says.

The Irish Wheelchair Association's Doyle says the impact is being felt most keenly among the newly disabled who require daily or 24-hour help, with new care packages notably less generous than those of several years ago.

But some on previously agreed packages are also being hit, he said, with suggestions that people whose independent living costs exceed 80,000 euros a year could be moved to institutions such as nursing homes.



MIXED SOCIAL IMPACT

"I don't know of anyone living independently being forced into an institution yet," says Doyle, relieved that he himself has enough movement to support himself without outside care. "But I've seen it written down as a suggestion. If that was widespread, that could really get the disabled community on the streets."

Like most charities, the association is struggling to cope with cuts in the funding it receives from the government as well as a sharp fall in charitable donations. Public sector trade union IMPACT estimates 10 percent of Ireland's voluntary and charity sector jobs will be lost by the end of this year.

There are some signs the process is deepening divisions in society. After 78-year-old great-grandfather Sean Whelan appeared on television complaining over potential cuts to his 230 euro a week pension, an unemployed youth accosted him while drinking in the pub.

"He said:" what are you complaining about on 230 a week, I only get 190 a week (in benefits)"," Whelan says. "I said: "what have you ever done to earn that 190. I started work at 14 paying tax to earn this pension". I thought he was going to hit me."

But again, the picture is mixed. Friends of the Elderly says the number of people volunteering to visit lonely elderly people in their homes has sharply increased.

Some are young health and social science graduates with no jobs to go to, but also workers with more time on their hands with no overtime available and the frenetic boom pace over.

"That has been the one silver lining to the crisis," said the charity's Kirwan. "Society has rediscovered itself. We have perhaps twice the number of volunteers we had two years ago, and of much higher quality. People have time on their hands for the first time in years and many of them have used it to help others."