A year ago, Ireland was the 'Celtic Tiger' -- an economic success story on par with any fast rising Asian nation. Today, Ireland is going through a wrenching economic slump. The World's Laura Lynch reports from Dublin.
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KATY CLARK: They could use a little positive economic spin in Ireland. The government has announced a five-year austerity program. Unemployment has soared to 11 percent, twice what it was a year ago. The Irish economy, once dubbed the “Celtic Tiger,†has lost its bite. The World's Laura Lynch reports from Dublin.
LAURA LYNCH: There's still some construction in Dublin including here in its southern reaches. But it's just an echo of the property boom Jamie Bergin remembers so fondly. Just a few blocks away, Bergin stands before a high-rise complex built by the firm he used to work for.
JAMIE BERGIN: This was actually a favorite one of mine because it actually came through so quickly. Six weeks and we got permission, and it was right at the beginning of the peak of the boom, so property prices were going through the roof.
LYNCH: That was just three years ago. Bergin was 29, making a six-figure salary, taking skiing trips and buying two properties. Then the boom went bust: Bergin lost his job last year. Now, he's having a hard time finding work.
BERGIN: It's tough. It's very difficult to get past, or even called into for an interview. I haven't even been called for an interview for any job that I've applied for.
LYNCH: Ireland's property bubble came on the heels of an expansion driven by foreign companies moving in, investing, and hiring. That led to more migrants arriving, driving up the demand for more homes. The cost of living and salaries were steaming ahead. The global financial crisis brought all that to a halt. The Celtic Tiger has been defanged. Economist Peter Honohan of Trinity College welcomes now the era of another altogether tamer animal.
PETER HONOHAN: And the Irish hare, you know, gallops ahead for a while and takes a rest. Well, this isn't a very comfortable rest, but we've had that sort of stop-start situation. I think the hare is a better image than the tiger.
LYNCH: This most uncomfortable of rest stops has also hurt the nation's banks. The government has already guaranteed bank debts and all depositors' accounts, and will take over so-called toxic assets – a risky proposition that could cost taxpayers billions. And while other countries have chosen to try to spend their way out of recession, Ireland has just introduced an emergency budget full of spending cuts and tax increases. Honohan says Ireland has little choice given the country's deficit may reach 14 percent next year.
HONOHAN: For sure, what the Irish economy needs now is spending. But we also have the cross-cutting pressure to prove to people who lend to us that government has capacity and plan to stabilize its debt profile.
LYNCH: The school bell, really more of a tone, signals the end of the day at St. Gabriel's elementary in working class Dublin. 26-year-old teacher Anna O'Loughlin is one of many feeling the effects of the budget's levies on public sector workers. O'Loughlin says it's become a struggle to make payments on the three-bedroom row house she bought two years ago.
ANNA O'LOUGHLIN: A year or two years ago, Ireland was in such a great situation. Where did the money go? Why didn't the government save? People on the ground are told to save money. Did they spend every single penny they got every year?
LYNCH: A lot of the money, a lot of government revenue, dried up with the slumping housing market – another reason why government is reining in public sector spending. For O'Loughlin, cuts to the education budget means her school had to drop two teachers who shared her
workload. Amid all the gloom, though, former WTO chief Peter Sutherland wants the Irish to keep things in context.
PETER SUTHERLAND: I am not bullish. I am realistic. I recognize that there is a hell of a challenge facing us and facing individuals which is very difficult, but it doesn't help not to focus on the positives.
LYNCH: Among them, Sutherland points out that while unemployment is climbing, there are still 80 percent more jobs in Ireland today than 15 years ago. And Sutherland says Ireland's drop in exports is far less than Germany, France, or the United Kingdom. That's of little comfort to Anna O'Loughlin.
O'LOUGHLIN: The morale of everybody in the country has just hit near enough to rock bottom. People are angry and people are upset, and people are frustrated. And the people in the country are different.
LYNCH: Jamie Bergin sees a difference, too – but the former high-flyer thinks too many of his countrymen are complaining instead of contributing to Ireland's recovery.
BERGIN: The pendulum swung too far. Things got a little bit out of hand. We just need to pick ourselves up, dust ourselves off, and move on.
LYNCH: It seems as though some already are. When a convenience store chain invited Dubliners to apply for jobs earlier this week, hundreds of people – professionals among them -- queued up for hours just to get an interview. For The World, I'm Laura Lynch, in Dublin.
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