Hardship, hardship and more hardship. Ireland has met the global financial crisis head-on like many of us did and been summarily crushed in its wake. This past November, the country accepted a bailout from the EU and IMF to the tune of €85 billion and now the realities of getting its house in order are hitting home.
This morning’s papers, like Reuter and the Telegraph are citing a new report which estimates the number of people leaving Ireland to seek their fortune elsewhere at around a thousand a week and predicts that over the 2 year period from April 2010 to April 2012, the country is going to see a hundred thousand disappear. Some people have decided to vote with their feet in order to escape high unemployment and rising taxes. This is a sure sign of growing unrest over Dublin’s austerity cuts.
With the lure of better opportunities in Australia, New Zealand and Canada, young graduates in particular are leaving Ireland in search of work. The rate of departure is the highest in recent history and surpasses the net outward migration peak of 44,000 in 1989.
Everyone is unhappy
Dissatisfaction with the government’s plans is not just being shown by the public. An attempt to unseat the ruling party led earlier this week to the mass resignation of six ministers. Ireland’s Prime Minister Brian Cowen was subsequently forced to call a general election. The country will go to the polls on March 11. There is talk that this is part of a movement to change the government but will anybody else who comes into power be able to do anything to soften the blow of the austerity measures which are certainly necessary to get the country out of the economic sinkhole in which it finds itself. Tightening one’s belt is never palatable.
Quarterly Economic Commentary – Winter 2010
Alan Barrett, Ide Kearney, Thomas Conefrey, Cormac O’Sullivan
The Economic and Social Research Institute
While our forecasts envisage positive growth in both GNP and GDP for the first time since 2007, the rates of growth are still slow. For 2011, we see the growth in GNP and GDP being accompanied by continued employment falls as output growth is achieved through productivity growth. Employment is expected to average 1.83 million in 2011, down 1¼ per cent on the 2010 number. We do expect employment growth in 2012 but at just 5,000, this is tiny relative to the labour force. The rate of unemployment is expected to average 13 ½ per cent in 2011 and 13 per cent in 2012. Net outward migration is forecast to be 100,000 over the two year period April 2010 to April 2012. The highest rate of net outflow in the 1980s occurred in 1989 when the rate reached 44,000. Hence, our forecast for an average annual net outflow of 50,000 is high in historic terms, albeit against a larger population base.
The Economic and Social Research Institute (ESRI) is a think tank in Dublin, Ireland. Its research focuses on Ireland’s economic and social development in order to inform policy-making and societal understanding.
The institute has played a role in national debates since the 1960s, such as joining the Economic and Monetary Union of the European Union, undertaking the National Development Plan, and initiating policies to combat poverty.
What happened in Ireland
Like the United States, Ireland had a property bubble which started to end in 2007. Irish banks were over-exposed on the Irish property market and could not weather the storm of the global financial crisis. Trouble began in mid-2008 as government deficits increased, many businesses closed and unemployment rose. The country has officially been in and out of recession in the past few years however recovery does not seem to in the forecast for the people. Emigration has gone up in 2009 and 2010 which is reflected in fewer people signing up for unemployment benefits.
The bailout package from the EU and the IMF which would total 85 billion euros over the next three years is to fund the government deficit and recapitalize banks. In return for the bailout, Dublin has had to agree to terms and conditions it has long considered unpalatable. There will be tax increases; there will be spending cuts. Agreements with unions thought of as being untouchable will have to come back onto the table.
This acronym has been used for years by various people when referring to the economies of Portugal, Italy, Greece and Spain. Variations include PIIGS where the second I refers to Ireland and PIIGGS where the second G refers to Great Britain. Obviously others have know for a long time that sooner or later the piper would be coming calling and the headlines referring to Greece earlier last year then Ireland seem to be bringing to our attention what others in economic circles have known for a long time.
There’s an old saying: pigs get fat; hogs get slaughtered. The global financial crisis has been a lesson for everyone up and down the economic ladder that the way business has been conducted during the last decade is not just flawed; it is criminal.
Everyone should see the documentary film Inside Job. Your blood will boil when you see the cavalier attitude of what turn out to be basically crooks in suits greedily fooling around with our money in the unquenchable thirst for higher profits even in the face of outright foolishness.
The conservative movement in the United States, the Teabaggers are pushing for less government, more free market. How quickly we forget. It is precisely this attitude, this relaxed governance, no regulations model which got us into this mess in the first place. People are naturally greedy and that greed while motivating, needs to be held in check or those same people will be tempted to take far greater risks than what is conceivably warranted by any circumstances. After all, you wouldn’t take your pension and bet it at the roulette wheel in Las Vegas.
Click HERE to read more from William Belle.
Oye! Times: Ireland on the brink: Can pigs fly?
by Yours Truly – Nov 24/2010
by Glen Allen – Nov 24/2010