How the Celtic Tiger Ate Ireland
During the 90’s and much of the 00’s, Ireland was the poster boy for the neo-liberal fantasy of sound economic management. Its Celtic Tiger economy along with the similarly feline economies of East Asia raced ahead in the pursuit of ever more impressive growth figures. As the money piled up, so unemployment figures fell. Ireland was changing – emigrants were returning and immigrants arriving – the country was alight with a new multicultural buzz and the nation revelled in its new found confidence. This scenario prompted much self-congratulatory back slapping among the political elite – most infamously at the now notorious Fianna Fáil tent at the Galway Races.
Sadly behind the reverie, the wheels were falling off. The economic boom had become bloated and lazy. Construction replaced technological innovation as the mainstay of the economy and with it a housing bubble emerged. Ireland became gripped by property mania – if the prices seemed extortionate it didn’t matter as they were sure to rise even higher. Confronted with such crazed financial reasoning young people found themselves being railroaded on to the property ladder. The banks were complicit in the mania, offering 100% mortgages (and higher) to young people who felt compelled to buy for the fear of being left behind.
The blanket property fever was punctuated by one or two dissenting voices who cautioned restraint. Such critics were vilified as neighsayers and pessimists – the Taoiseach (Prime Minister) at the time even went so far as to suggest that one should commit suicide. Ultimately revealed as the ringmaster in chief of the whole happy delusion that same Taoiseach was later ushered from power for receiving payments from property developers. A happy self-interested cabal of politicians, property developers and bankers had emerged and with them a culture of “if you scratch my back, I’ll scratch yours” was driving Ireland toward a fiscal abyss.
The global financial crisis brought about the inevitable and seemingly overnight the property bubble burst. The banks went bust, the country bailed out the banks and then the country realised it couldn’t afford to bailout the banks and had to call on the IMF and the EU to bail out the country. The situation spelled the end of the then government and ushered in a new coalition intent on reform – although much of this has proved to be little more than pre-election bluster and soon gave way to the comfortable routine of realpolitik and austerity.
One of the best ways to measure the impact of the crisis is through looking at the youth unemployment figures. At the height of the economic miracle youth unemployment stood at fractionally over 6% – a figure lower than Germany’s is today. Right now, the rate touches 30% and in some regions is as high as 50%. Thanks to the long established safety valve of emigration these figures are artificially low and misrepresent the true extent of the crisis. The real impact can be seen in the ghost estates, the empty businesses, the undermanned football teams, the thronged foreign jobs fairs, the long distance Skype calls, the tearful airport farewells and the doubt etched into the faces of the young.
Emigration is once more a tangible presence in Ireland. Perhaps realising their own impotence the government have taken to subtly promoting the virtues of life abroad – young jobseekers are routinely mailed information on jobs abroad. This move is seen as a cynical massaging of the figures in some quarters but defended in others as simply acting in the best interests of youth. Elsewhere the government’s jobbridge scheme – an internship programme – has come under fire for being exploitative although figures do suggest that it is having some positive effect.
A lot now rests on how the funds from the youth guarantee scheme are invested. Wise investment could see Ireland replicate Finland’s success where 83.5% of participants received a successful intervention within 3 months. Unwise investment, on the other hand, could see hundreds of millions of euros being flushed down the toilet.
The crisis started in 2008 and it is now 2014. In that time the slow churning of the political gears has already allowed Ireland to lose a generation. With them have gone skills, dynamism and innovation – in short the prime ingredients for a sustainable recovery. True political leadership would look not to exacerbate this loss but to capture the capacity of youth to act as job creators. Telling people to leave is the easy option, getting them back to work is much harder but ultimately much more rewarding.
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