In This Article
30-Second Summary
Headline Links: Ireland sees economic slump, decline in immigration
Audio: ‘Rediscovering its recessive gene’
Background: Ireland’s gloomy economic indicators
Reaction: Interview with Irish Immigration Minister Conor Lenihan
Historical Context: Ireland’s rise over the past two decades
Opinion & Analysis: Ireland bracing for recession
Related Topic: ‘What Does Irish “No” Vote Mean for the EU?’
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Associated Press
Irish Minister for Finance Brian Lenihan
Irish Minister for Finance Brian Lenihan
The ‘Celtic Tiger’ Falls on Tough Times
by
Anne Szustek
Ireland’s economy has been thriving for more than a decade, but now there are indications of the first fall in output since 1983 and first net emigration since 1990.
30-Second Summary
Ireland’s vigorous economic expansion over the past 20 years has earned it the moniker “Celtic Tiger.”
The transformation from one of Europe’s poorest nations to a high-tech upstart beckoned foreigners to the Emerald Isle. The country has seen 7.2 percent annual growth for the past decade, partly due to “buoyant labor markets,” writes the Financial Times. When eight Eastern European nations joined the EU in 2004, the number of immigrants to Ireland was in the hundreds of thousands.
But there has been a 3.3 percent jump in applications for unemployment benefits during May and a report from Irish think tank the Economic Social Research Institute predicts that GDP will decrease 0.4 percent this year. Some Irish are recalling the country’s recently humble economic standing.
Irish Finance Minister Brian Lenihan called the ESRI report a mere “wake-up call.”
But as Llewellyn King writes in The Globalist, Ireland’s culture tends toward fatalism, including the country’s economic health. Already, pundits such as RTE radio host Pat Kenney are saying “it’s time for Ireland to rediscover its recessive gene.”
As long-time residents contend with bearish economic indicators, the Eastern European immigrants, whose lower wages helped make Ireland’s original upswing possible, are returning to their home countries, welcomed back by upstart “tiger” markets.
Of the immigrants, restaurateur Vincent Mullen told the Wall Street Journal, “I couldn’t afford to be in business without them.”
The transformation from one of Europe’s poorest nations to a high-tech upstart beckoned foreigners to the Emerald Isle. The country has seen 7.2 percent annual growth for the past decade, partly due to “buoyant labor markets,” writes the Financial Times. When eight Eastern European nations joined the EU in 2004, the number of immigrants to Ireland was in the hundreds of thousands.
But there has been a 3.3 percent jump in applications for unemployment benefits during May and a report from Irish think tank the Economic Social Research Institute predicts that GDP will decrease 0.4 percent this year. Some Irish are recalling the country’s recently humble economic standing.
Irish Finance Minister Brian Lenihan called the ESRI report a mere “wake-up call.”
But as Llewellyn King writes in The Globalist, Ireland’s culture tends toward fatalism, including the country’s economic health. Already, pundits such as RTE radio host Pat Kenney are saying “it’s time for Ireland to rediscover its recessive gene.”
As long-time residents contend with bearish economic indicators, the Eastern European immigrants, whose lower wages helped make Ireland’s original upswing possible, are returning to their home countries, welcomed back by upstart “tiger” markets.
Of the immigrants, restaurateur Vincent Mullen told the Wall Street Journal, “I couldn’t afford to be in business without them.”
Headline Links: Ireland sees economic slump, decline in immigration
The ESRI report estimates the number of completed new homes have more than halved from 2007 to 2009, shrinking from 78,000 to 30,000.
Source: Financial Times (free registration may be required)
The Irish governmental employment agency is working to find jobs for Irish construction workers in Eastern Europe. Said Kevin Quinn, the manager of international employment, “It’s the reverse of what we’ve been doing for the last 10 years.”
Source: The Wall Street Journal (subscription required to read full article)
Audio: ‘Rediscovering its recessive gene’
Television personality Pat Kenny said on Wednesday’s edition of his RTE program that “it’s time for Ireland to rediscover its recessive gene.” The country’s current economic duress is recalling the 1980s for some. “People of a certain age … like myself … even remember the 1970s,” says Kenny.
Source: RTE
Background: Ireland’s gloomy economic indicators
The number of Irish citizens signing up for unemployment reached a 10-year-high during May. Between April and June, applications rose from 199,700 to 207,300, an increase of 3.3 percent. Economist Jim Power said that there are few economic remedies the government can take in the short term to stem the downturn, however the state will need to cut back spending in some sectors and channel the funds into other areas. "Things are going to get significantly worse over the next 12 months, and the numbers could easily reach 225,000 or 230,000 by the end of the year,” said Power.
Source: Irish Independent
The Economist predicted in a 2008-2009 outlook for Ireland that “GDP growth is expected to slow sharply in 2008-09, mainly because of the ongoing slowdown in the previously overheated property sector. If the decline in house prices were to accelerate, a recession would be likely.”
Source: The Economist
Reaction: Interview with Irish Immigration Minister Conor Lenihan
Conor Lenihan, Ireland’s immigration minister, reflected on the role a sluggish economy could play in Irish-immigration relations in an interview with The Wall Street Journal. “The irony is that such is the skills level inherent in the migrant population that it's quite possible in a downturn there are quite a lot of migrants who could be retained versus indigenous people. … Because construction has been a huge part of employment in Ireland in recent years, it's also been one of the [biggest immigrant employers]. But many immigrants have also penetrated higher-skilled employment categories.”
Source: The Wall Street Journal (subscription required to read full article)
Historical Context: Ireland’s rise over the past two decades
Some 20 years ago, Ireland was at risk of being “the sick man of Western Europe,” writes Llewellyn King. Structural unemployment stood at 22 percent and an ingrained sense of fatalism stemmed from the country’s economic and political histories. But with the 1992 Maastricht Treaty’s subsidies for infrastructure development and agriculture, followed by the rise of the Internet throughout the decade and the 1998 Belfast peace agreement, the country developed into what came to be known as the “Celtic Tiger,” becoming an economic model for other emerging market nations.
Source: The Globalist
Opinion & Analysis: Ireland bracing for recession
The Guardian’s Allegra Stratton feels that the Irish people are turning against the EU as it becomes less advantageous to the Irish economy. During the 1990s, the economy flourished with help from considerable EU funding. Now, that funding has shrunk and Ireland is on target to become a net contributor to the EU. “Ireland may simply be acting rationally,” Stratton writes, “pulling up the drawbridge on a political project that did so well for it once but could sour now that economic times are harder for all.”
Source: The Guardian
“The non-housing sector must be in robust shape if growth is still expected in the economy overall,” writes The Irish Times.
Source: The Irish Times
According to a PricewaterhouseCooper survey published in June, 14 percent of CEOs in Ireland believe the national economy will be strong over the next 12 months and 77 percent of were unhappy with local labor costs. Of the Irish company heads that were polled, 88 percent were satisfied with the corporate tax structure, however.
Source: RTE
Irish newspaper columnist Kathy Foley writes on her blog that 1940s fashion will be a trend in Ireland this winter—not in the glamour girl sense, but in terms of rationing. “Those pointy heads over at the ESRI may think the economy is going to recover by 2010, but that is seasons away. … In the meantime, those of us who care about being on-trend are going to have to cut our cloth.”
Source: Kathy Foley’s blog
Related Topic: ‘What Does Irish “No” Vote Mean for the EU?’
Ireland voted against ratification of the Lisbon Treaty earlier this month, which would have established a constitution for the European Union.
Source: findingDulcinea
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