Ireland, the ruby isle
This penultimate guest post about Ireland’s economic meltdown features Stephen Tucker, from Roscommon, who blogs about style, etiquette and other things at Myopic Psychotic. Here he looks back at the history of the Celtic Tiger.
“Ireland, fondly referred to as the Emerald Isle, may just as well be renamed the Ruby Isle, the nation very much in the red; Ireland is broke. The highly publicised demise of Ireland’s once booming economy was documented world wide during the last three weeks. The facts speak for themselves: the Celtic Tiger of old was a mystical creature; there was no success story, only a bubble economy that the Irish public enthusiastically inflated. The Irish economy turned a corner in September 2008 when the government pushed through a bank guarantee to back main Irish banking institutions. The depth and scope of the bank guarantee was widely criticised and partly blamed for the mess the economy finds itself in today. Since then, numerous bad decisions and draconian, proposed cutbacks failed to incite public reaction until Saturday 27th November, when an estimated 50,000 people took to the streets to demonstrate against the “austerity plan”; an attempt to save €15 billion through cutbacks and savings.
Culturally, we Irish are famous for our laid back nature; the “ah sure, it’s grand” approach to life. We are not complainers, preferring to suffer in silence, occasionally venting through a whispered aside. A turnout of 50,000 at a demonstration is considerable, and offers an acute gauge of the feelings among the public. During November 2010, it became clear the IMF would intervene in the financial affairs of Ireland. The nation braced itself for impending doom. National airwaves dedicated massive amounts of airtime to speculate on cutbacks. The IMF could potentially push for trimming back the bloated public sector, reducing social welfare, increase taxes and enforce a lower minimum wage. Analysts debated at length whether Ireland might be bullied into abolishing its 12.5% tax rate, an action that could drive American multi-nationals to the shores of alternative low tax jurisdictions. The cost-cutting measures of the IMF were over-speculated, instilling fear and insecurity into a public already enduring the pain of a recession.
In 2004 the Economist Magazine named Ireland as the best place in the world to live. This was the age when America could not get enough of our darling export Waterford Crystal. Riverdance travelled the globe, taking nations by storm. We were damn proud to be Irish. The country, once on the periphery of Europe, experienced sizable influx of foreign nationals, giving rise to Dublin as one of the most cosmopolitan cities in the world. Oh we were proud. And oh how we gloated. Initially, the arrival of the IMF left the national psyche dumbstruck, but soon a curious sense of embarrassment emerged. People felt they had been duped into believing the Celtic Tiger to be real. The age of easy borrowing – 100% mortgages, limitless personal finance, borrowing for decadent weddings and deposits for homes paid for by credit cards – placed us in this fine mess. The property crash, probably the greatest contributor to the downturn, left countless occupants sitting in their homes, questioning the inflated sums paid for their bricks and mortar. We ignored the hard lessons learned by the UK with property bubbles, comforting ourselves with soothing words of economists – employed by banking institutions – who quoted “unique factors” that defied the laws of basic economics. In hindsight, how did we not see this coming? In truth, we are embarrassed for believing the success that never was.
Saturday’s demonstration clearly marks breaking point for many thousands throughout Ireland seething with anger at a financial situation they feel no responsibility for. Public sector workers, who have already taken significant pay cuts, are now faced with further cuts and potential job loss. Unemployed individuals are threatened with reductions in social welfare “to encourage them to look for work” when there are fewer jobs. Insufficient services from a health board in crisis are to be cut back. National anger is mostly aimed at banking institutions that performed “reckless lending”. Anger is also directed towards the Irish financial regulator that failed to do its job by investigating a banking system rife with corrupt lending practices. There is massive disillusionment with both political figures and the political system itself, which has simply let down the public down. What happened to fortunes made through record tax receipts when things were good? Why is it now we are learning of the dire state of affairs? There is a craving for change in a political system in turmoil. However, the alternatives seem limited.
Whether spin or factual statement by the political opposition, the claim Ireland has lost its sovereignty is probably the saddest aspect of recent events. A relatively young country that for centuries fought for independence and identity has now forfeited management of its own finances. As in previous decades, countless young people will again leave Ireland’s shores to secure employment abroad. Our “good times” were meant to seal an end to heart-breaking emigration. It’s no surprise public spirit is flagging. On 17th November the Irish Times invited readers via Twitter to submit things they loved about Ireland. Some of my favourites include “six degrees of separation in the world and only two for Ireland,” “wakes and funerals turning into a party” and “all the ailments that can be treated by putting the kettle on. The suggestions themselves demonstrate the unique Irish way of coping through humour. We’ll work through our insecurity, anger, embarrassment and sadness for the state of our economy. We’ll even laugh along the way. I just hope we learn some lessons as we do.”
[Image comes from here]