“It is very complex..”

The Republic of Ireland’s economy is now officially in recession after a second successive quarter of negative growth and, as he told the BBC’s Noel Thompson, former Taoiseach Bertie Ahern is back to being a “constituency politician”.. Policing, and St Andrews, was dealt with at the beginning of the interview on Hearts and Minds today, by the end the discussion had moved on to the Lisbon Treaty, referenda, and the Mahon Tribunal..

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  • Greagoir O’ Frainclin

    Good on B..B..Bertie, for he is repeating what all agreed to at the SAA!

  • frustrated democrat

    Who isn’t happy to be in the United Kingdom now the Celtic tiger has paled to an old tired tabby?

    An economy built on construction is always at risk. This underlines why a United Kingdom is in the best economic interests of all in Northern Ireland as it can best weather worldwide economic storms.

  • the future’s bright, the future’s orange

    wouldn’t speak too soon democrat. We are heading in the same direction!

  • DK

    Yes, don’t get too cocky FD, Northern Ireland usually runs at a rate inbetween the Republic and the UK average – so while we have benefited from the growth in the South by usually growing faster than most UK regions, we are now falling faster than most UK regions (although not as bad as the Republic).

    We have 3 things going for us in the recession:

    1. We have a big public sector – public sectors are less likely to shed jobs/cut wages, so purchasing power remains high in NI

    2. We have sterling, and with the price differential with the euro, large numbers of shoppers from the Republic are constantly making their way across the border – something nowhere else in the UK can claim

    3. Our exposure to the financial sector is low. The same cannot be said for regions like Dublin and London, or even, with the HBOS/Lloyds merger, Scotland.

  • Hugh Dubh Oneil

    economies boom and then they contract its called an economic cycle.and its happening to the UK as well because they also built there economy around construction.at the end of all the turmoil the average irish person will still be richer than there counterpart in the uk.
    -economic interests play a very small part in peoples calculations of whether they want reunification.when the UK was wealther nationalists still wanted to join the ROI and now that the shoes on the other foot unionists still dont want to join the ROI.
    -unionists glee about the ROI going into recession is misplaced as the UK will soon be joining us in the hole and for more or less the same reasons.also when uk banks are collapsing and irish banks arent its probably safer to be in the ROI
    “The UK economy will fall into recession this year, the European Commission predicted today.

    The commission – the executive branch of the EU – said UK gross domestic product (GDP) will shrink by 0.2 per cent between July and September, and another 0.2 per cent during the final three months of the year. That meets the definition of a recession as two successive quarters of negative growth.

    It follows another UK recession warning from Paris-based think tank the OECD last week.

    The UK’s economic performance over the second half of this year is worse than the euro area’s predicted average growth, which will be flat over the third quarter and edge up 0.1 per cent in the fourth.

    The EC also downgraded the UK’s annual GDP growth this year, from 1.8 per cent to 1.1 per cent. This compares with a 1.3 per cent average for the euro zone.

    Spain will join the UK in recession by the end of this year, the EC added.

    Europe’s biggest economy Germany entered recession in the second quarter of this year, the body said, but will recover marginally during the fourth quarter.

    Explaining the basis for the forecasts, the EC said: “Tensions in financial and asset markets, ongoing moderation of growth in the world economy, the elevated levels of commodity prices and a widening housing shock are taking a toll.”

    The OECD forecast the UK economy would contract 0.3 per cent in the third quarter, and by 0.4 per cent in the fourth on an annualised basis.

    The forecast made “significant revisions” for economic growth prospects for the rest of the year in Spain and Britain, largely due to the countries’ housing market woes.

    UK house prices have fallen nearly 13 per cent year-on-year, Nationwide Building Society said last week, severely impacting consumer confidence.

    The EC said: “A downturn in housing markets is likely to affect overall economic activity adversely.”

  • Comrade Stalin

    DK,

    3. Our exposure to the financial sector is low. The same cannot be said for regions like Dublin and London, or even, with the HBOS/Lloyds merger, Scotland.

    Outside of the public sector, financial services are a significant proportion of the jobs here :

    – Abbey National and HBOS have large call centres near the Markets, HBOS also does IT there, I believe

    – Northbrook (= Allfirst insurance, USA)

    – Liberty IT (= Liberty Mutual, USA)

    – Citibank have a massive operation down in the “Titanic quarter”. This covers IT and financial work.

    – there are small places like Wombat, and that other joint down near Newry, who are doing clever financial software

    Most of these places are based close to Belfast city centre, and in turn create other jobs. There are loads of little sandwich bars and coffee shops that have popped up during this time.

    I was in the “Cathedral Quarter” last night. The restaurants there that I could see in all looked dead, and this was at 7pm.

    If we are not very careful, this recession could risk much of the “new economy” that we have built here during the last ten years. IT jobs can be a bit of a strange thing; one way for companies to save money during a recession is to invest in their IT to save costs in the longer term, so they may be safer than other people are. But I don’t expect we will be entirely without impact.

    I wouldn’t be so sure about the public sector largesse either. The British government will not have the tax base to maintain spending at it’s current levels, and borrowing heavily raises a number of serious implications. A spending cut in Northern Ireland won’t do any electoral harm to a British government.

  • Glencoppagagh

    Hugh Dubh
    “at the end of all the turmoil the average irish person will still be richer than there counterpart in the uk”
    I have to correct you here. You’ve fallen into the common error of confusing income and wealth. If I’ve been earning more than you for hundreds of years but you have pulled ahead for the last ten, unless I have spent all on riotous living, isn’t it likely that I’ll have accumulated more wealth than you?
    I don’t take any pleasure in the RoI’s economic discomfort although to judge from your views on previous threads, you’ll probably agree that it was entirely predictable.
    And I think you’re wrong about nationalists wantign reunification when the Irish economy was feeble. Most of them could see for themselves how awful things were across the border and for most of that period their nationalism was largely vestigial, safe in the knowledge that it wasn’t going to happen in the foreseeable future. eg the utter lack of support for the IRA’s campaign in the late 50s.

  • DK

    “eg the utter lack of support for the IRA’s campaign in the late 50s.” But the support was highest in the 70s-80s when the Irish economy was worse. I think that the drive for reunification is pretty much independent relative of economic conditions on either side of the border, and more to do with perceived levels of oppression. So while the oppression was probably the same in the 50s and 70s, by the 70s the generation was one that was prepared to do something about it – whether by civil disobediance, or trying to kill whoever seemed most likey to be the cause (which varied from any prod will do, to actual unionist politicians).

  • Hugh Dubh Oneil

    Glencoppagh
    “You’ve fallen into the common error of confusing income and wealth. If I’ve been earning more than you for hundreds of years but you have pulled ahead for the last ten, unless I have spent all on riotous living, isn’t it likely that I’ll have accumulated more wealth than you?”
    No-because you were never that far ahead and whatever lead you,ve had has been wiped out in the unprecedented growth of the celtic tiger boom.the only country wealthier than ireland in the EU is luxembourg.the average irish person has a higher income and more purchasing power than their uk counterpart.now we might blow it and the uk might pass us out again.but I personally doubt it.
    -by your logic if a one country has been more economically developed than another country then because of its hundreds of years of “accumulated wealth” its position is unassaible.but thats not how it works.China will pass out the US as the worlds most powerful economy sometime in the next 20 years despite the US having a headstart of hundreds of years of accumulated wealth.things change Ireland passed out the uk.
    -“I think you’re wrong about nationalists wantign reunification when the Irish economy was feeble. Most of them could see for themselves how awful things were across the border and for most of that period their nationalism was largely vestigial, safe in the knowledge that it wasn’t going to happen in the foreseeable future. eg the utter lack of support for the IRA’s campaign in the late 50s.”
    The large majority of northern catholics since the founding of the state have consistently voted for political parties who support the concept of a united Ireland.Thats why there called nationalists.I dont think it was some sort of mischievious bluff.They want a united ireland all right there just not prepared to kill for it.
    Opinion polls consistently put the “unionist” catholic vote at around 20%.so 80% of catholics would want a united ireland regardless of economic conditions and 20% seem happy with the status quo IMHO

  • Glencoppagagh

    Hugh Dubh
    Sorry, you still haven’t got it.
    “because you were never that far ahead and whatever lead you,ve had has been wiped out in the unprecedented growth of the celtic tiger boom.”
    Try doing the maths. If one country grows by 5% pa consistently for say 100 years, it’s economy will be 130 times larger. If another country grows by 4%pa consistently over the same period, it’s economy will be 50 times larger (the power of compounding). Now if the smaller economy grows by 10% for 10 years while the other stagnates, it still won’t have caught up. In practice, I think the gap between UK and Irish growth has probably been greater, given that the RoI largely missed out on the 50s boom.
    “China will pass out the US as the worlds most powerful economy sometime in the next 20 years despite the US having a headstart of hundreds of years of accumulated wealth.”
    Yes, but the Chinese still won’t have as much wealth per capita as the Americans unless they try another ‘Great Leap Forward’ and starve a few million more peasants to death.
    “the only country wealthier than ireland in the EU is Luxembourg”
    Well I haven’t been to Denmark or Sweden for a few years but even then they looked a lot wealthier than Ireland does now. Here again, you’re mixing up GDP per capita with wealth and don’t forget that a substantial chunk of Ireland’s GDP flows out to multinational shareholders.

  • Pete Baker

    Anyone read past the opening line?

    Or even watch the video?

    Just asking..

  • Glencoppagagh

    Pete
    Then why did you start the thread like this:
    “The Republic of Ireland’s economy is now officially in recession after a second successive quarter of negative growth and, as he told the BBC’s Noel Thompson, former Taoiseach Bertie Ahern”