Activists more accustomed to campaigning against the debts of countries like Zimbabwe, Egypt, Ecuador and Indonesia were instead outside the Irish embassy this morning. Dressed as zombies, we hoped to shed some light on the so-called "zombie banks" whose debts continue to drain resources from an Irish public sector that is being slashed to the bone.

Ireland's financial crisis has much in common with scores of countries across the developing world. The country has been brought to its knees by an enormous debt, which originated not with excessive public spending, but a footloose financial sector that gambled with the future of the country. Without so much as a vote, Ireland's people found themselves on the hook for tens of billions of euros of reckless investments.

The ultimate symbol of this form of crony capitalism in Ireland is Anglo Irish, the bank that started Ireland's slide into the abyss. Anglo Irish lent vast sums of money to fuel Ireland's property bubble, in the process making fortunes for rich speculators. Anglo is believed to have 15 customers who owe the bank more than €500m each.

When the bubble burst, the Irish government stepped in to underwrite the bank – ultimately being forced to nationalise it. This disastrous decision was not based on any assessment of the use of Anglo to the economy. Economics professor Morgan Kelly said at the time that Anglo – as well as Irish Nationwide, which was also brought into public ownership – "were purely conduits for property speculation. They fulfil no role in the Irish economy." He said it would be "better to incinerate €1.5bn than squander it on Anglo Irish Bank".

Today Anglo Irish, rebranded as the Irish Bank Resolution Corporation, is a zombie bank – a bankrupt institution that exists to channel government money to a group of bondholders who the Irish people can't know anything about, and who themselves were fuelling Ireland's increasingly speculative economy.

Ireland has been able to repay these reckless private debts because it has received bailout money from the European Central Bank (ECB), the International Monetary Fund and the European Union. As in scores of developing countries before, so in Ireland, a bailout is not about ensuring a state can look after its people, but that it can continue repaying its private creditors. In this case, unlike past debt crises, the IMF looks relatively enlightened compared to the ECB, which made clear that it was on the side on the creditors, and insisted on repayment of Anglo's bondholders in full.

To date over €7bn has been paid by the Irish government to Anglo's investors. The next payment, of €1.25bn, is due to be paid on Wednesday.

As in many other countries hit by debt crisis over the decades, Ireland's people are starting to fight back. Activists from thinktanks, community groups, trade unions and international campaigns have launched a campaign calling for a suspension of the Anglo payments. The newly formed Debt Action Network says – as have activists as far apart as the Philippines and Kenya, Bolivia and Pakistan – "we don't owe and we shouldn't pay".

In the coming 20 years, Anglo's debts will cost Ireland at least €47.9bn – and probably much more given the state will have to borrow further money to repay it. Much of this money will head towards the ECB to pay back its loan, which allowed the Irish government to make the fatal mistake of paying back Anglo's reckless bondholders.

Yet the price of these debts will be borne most heavily by Ireland's poorest – who are neither responsible for, nor benefited from, the financial bubbles these speculators inflated. The ECB's bailout package has imposed swingeing budget cuts, a reduction in the minimum wage and, as a direct result, an economic contraction of 15%, with 15% unemployment. More generally, a government unable to control its own economic policy is unable to act in the interests of the people that elected it. It has lost its sovereignty.

Ireland's government argues that stopping payment will set a "financial bomb" off in Europe. In fact it would do no such thing – the ECB could easily cover the payments with a new issue of money, which might even help mitigate European deflation. The alternative – as Dublin community worker John Bissett pointed out – is the most deprived communities in Ireland will continue to experience the full force of "financial bombs" set in motion by the ECB's austerity programme.

Europe needs a "jubilee-style" debt cancellation today, just as African nations needed it when our campaign began in the late 1990s. Just as in the developing world, so in Ireland, governments must take on zombie capitalism if we are to defeat a financial system in which speculative profits matter more than real lives.