17 Mar 2012

Beyond the bunting, is Ireland really bouncing back?

To the outsider, Ireland does not seem like a country which is gripped by a prolonged economic crisis, writes Dr Peter Stafford. But will the Guinness be flowing freely tonight for St Patrick’s day?

Beyond the bunting, is Ireland really bouncing back? (Getty)

Tourists visiting Dublin for St Patrick’s day expecting to see a country gripped by a recession are likely to be disappointed. The pubs and restaurants will be as packed as they always are on the Paddy’s Day bank holiday, and around the country, the economic woes of Ireland are likely to be put to one side for at least one day of national partying. To the outsider, Ireland does not seem like a country which is gripped by a prolonged economic crisis.

In the glass and steel buildings of Dublin’s docklands and its red-brick Georgian squares, business activity still bustles. The commercial heart of Ireland’s capital city looks and feels as thriving as it ever has been. Those in work in Ireland still bring home some of the highest wages in Europe, the tax burden remains low, and compared to other countries, the Irish show some of the highest personal happiness rates in Europe. Prices of everyday goods have fallen from their crazy Celtic Tiger levels and competitiveness is steadily returning to the economy.

Last year 76,000 people left Ireland, an increase of 45 per cent on the previous year.

Furthermore, the EU and IMF paymasters are happy with Ireland’s slow trek to fiscal independence. The lack of visible signs of recession reflects the fact that until now, Ireland has been experiencing a technical banking and accounting recession rather than a real recession; but as time goes on, the impact of two years of austerity and IMF policy direction are beginning to take their toll in a more visible way.

Beyond the bunting, celebration and bustle of a modern European state celebrating its national holiday, society and the economy are struggling. The parish towns and the pubs tonight will be missing a significant cohort of the young men and women who would normally be leading the party. Last year 76,000 people left Ireland, an increase of 45 per cent on the previous year, and with unemployment remaining stubbornly high at 14 per cent, according to Irish migrant advice centres around the world, youth emigration is likely to increase in 2012.

More from Channel 4 News: 'The Irish voter doth protest too little'

A “working overseas” expo in Dublin last week welcomed 12,000 visitors, each queuing for up to four hours to pay €10 to submit their CVs to recruitment companies from Canada, Australia and the UK. According to organisers, 2,000 interviews were held and 250 job offers were made then and there. Plenty of other unemployed young Irish people, motivated by reports from friends enjoying their first ever taste of work overseas, will undoubtedly follow speculatively.

Sporting chance

Across the west coast of Ireland, around Kerry and Galway, the recession and emigration are having an impact on another embedded way of Irish life – sport. Countless hurling and Gaelic football teams have been unable to complete in local leagues this year because, for the first time in memory, they have been unable to find enough young men to form a team. Instead, in New York alone, 300 people arrive every week from Ireland to seek work; a phenomenon all too redolent of generations past who saw St Patrick’s day from the US.

On a political level, ongoing objection to repaying the debts of Ireland’s failed banks has effectively stalled the year old government’s legislative agenda. Fiscal reforms such as the introduction of an annual property tax, the charging for use of rural septic tanks and cuts to frontline services are being met with heavy objections from a wide coalition of those who oppose piling the debts of Ireland’s banks onto the already high exchequer debt.

The public opposition to the property tax (which the government insists is a local service charge) is reminiscent of the reaction when a similar levy (a community charge) was foisted on an unwelcoming British electorate in the 1980s. The poll tax was, of course, subsequently dropped because of protests. The IMF, however, which can effectively control the government’s legislative priorities, shows little concern for public opposition so long as the books are balanced and the debts repaid.

At a time when Iceland has begun to prosecute the bankers and politicians who held positions of power when its economy collapsed, the inability of Ireland to hold its failed bankers and politicians to account makes hollow the old joke that the only thing which separates Iceland and Ireland is one consonant and six months.

Dr Peter Stafford is an economics and business research analyst.