BY JOE LEARY
SPECIAL TO THE BIR
The strength, tenacity, and courage of the Irish people in dealing with their own share of the world’s collapsing economy in the 2007-2009 period should make Irish Americans very proud. Yes, there were abuses and perilous risk-taking that made Ireland’s problems more severe than that of most countries. But now, in January 2014, we can see real improvement, for which we must pay tribute to the intelligence and discipline of the Irish people. Irish Minister of Finance Michael Noonan TD put his tribute this way: “The real heroes and heroines of the story are the Irish people.”
Ireland is the first European country that found itself in serious trouble six years ago to right itself after suffering the effects of the misdeeds of its banking hierarchy. European fiscal managers have been unstinting in their praise of Ireland’s new ways of managing its budget system.This has been a hard earned lesson for politicians and businessmen that will hopefully be remembered in the years ahead.
Credit Ireland’s current leaders and the loyal Irish people for the emerging, almost miraculous signs of real improvement in the country’s economic prospects going forward.
According to Ireland’s Central Statistics Office website, the unemployment rate is now down to 12.5 percenty after reaching nearly 15 percent in the past three years. And Ireland’s foremost business organization IBEC (Irish Business and Employee Confederation) forecasts a 2.8 percent growth rate in the national economy this year while noting that 60,000 more Irish brought home paychecks this past Christmas.
The National Asset Management Agency (NAMA) was set up by the government in 2009 to relieve the banking system of weak, unpayable mortgages so that new funds could be used more freely for growth projects. They took possession of hundreds of properties, paying the banks as little as 7 percent of the mortgage value, and are now selling those properties into a growing market, returning significant funds to the Irish Treasury.
As to the real estate market, Dublin housedprices are 48 percent lower than they were in the overheated year of 2007. But they have risen by 15 percent over last year.As if we needed more reassurance that Ireland was on its way back, Forbes magazine, the renowned USA Financial publication has named Ireland as the “Best Country for Business,” citing a favorable business attitude, low corporate taxes, and government agency assistance as prime reasons for that recognition and adding, “despite economic troubles, Ireland still maintains an extremely pro-business environment that has attracted investments by some of the world’s biggest companies over the past decade.”
And one news blogger, David McWilliams, led his recent column with the headline, “Ireland’s engines start to fire.”
It should be recognized, however, that Ireland is still paying off huge debts as the result of the banking crisis. The exuberance surrounding the “Celtic Tiger “atmosphere a few years ago caused many problems the effects of which remain an issue today with the remaining debt. Retail prices, restaurant prices, golf course fees, and Irish salaries all skyrocketed. Tourists were shocked to see their hotel bills. One golf course in Southwest Ireland charged almost $400 for a round of golf.
In a major effort to cut government expenses and pay off the huge debt employees have had their salaries and pensions cut by an average of 20 percent. As a group, the Irish, while complaining bitterly, have accepted the necessity of paying the country’s debt which came into full view in 2009 as the government had to borrow nearly $100 billion to keep the banking system afloat. Misguided and failing bank loans were crippling all development, and the government was running out of money.
The International Monetary Fund (IMF) and the European Union (EU) advanced the funds on the condition that Ireland submit itself to regular investigations by EU and IMF personnel, a mandate that some saw as a loss of Irish sovereignty.
The government then set in motion a series of draconian austerity cuts to its expenses. And it worked! Just two weeks ago, on Dec. 15, 2013, the bailout conditions were lifted after an asset review process. While this doesn’t mean that the days of austerity are, many of the European controls have been cancelled.
All of which is a major achievement for the government and the Irish people, and a source of pride for both.