As Ireland votes, a note of optimism

The Economist pronounces:

It is true that Ireland will not soon pull itself from the economic bog. Recovery will be slow at best, particularly if an inflation-wary ECB starts to jack up interest rates. Unemployment is likely to stay in double figures for some time. Some fear that the cost of servicing the debts to the EU and IMF, and of feeding the insatiable maw of the banks, will eventually force Ireland into a debt restructuring. This would be a terrible blow to a country desperate to believe that the worst is over.

Yet Ireland is not about to return to the dark days of the 1980s. Numerically, the recession has sent living standards back only to the levels of around 2002 (see chart 2). The flexible economy will remain attractive to multinationals seeking a toehold in Europe, especially if it keeps its low corporate-tax rate. Domestic demand is still depressed—a big concern. But unlike other troubled euro-zone countries, Ireland is regaining competitiveness by reducing unit labour costs. Exports are booming, and there should be a current-account surplus this year for the first time in over a decade. The demographic outlook is favourable. “There are no brakes to growth if we can get this thing going,” says Danny McCoy, head of the Irish Business and Employers Confederation.

At least as important, despite the fog of gloom sitting over the country, Ireland has much to be proud of. Not all the gains of the Celtic Tiger years were squandered. An optimistic, entrepreneurial spirit emerged that will not be crushed by a few years of recession. Higher education has expanded dramatically—30% of Irish students are the first in their family to attend university—as has the labour force. A generation has grown up knowing nothing but prosperity. This accumulation of expectation and experience makes Ireland a very different country from the weary, fearful place of the mid-1980s.

Perhaps the most hopeful future for Ireland lies in becoming, for the first time, an ordinary small European country, with a properly functioning democratic system and a stable, diversified economy. But first it must begin to see itself with sober eyes. Kevin Gardiner of Barclays Wealth, who coined the phrase “Celtic Tiger” in 1994, says that Celts have a nasty habit of extrapolating both good and bad times for ever (as a Welshman, he dares to make such generalisations). Just as the Irish suffered a bad bout of irrational exuberance in the boom years, they have now been overcome by excessive pessimism. Or, as Anne Enright, the novelist  puts it, “Ireland is a series of stories it tells itself. None of them are true.”

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  • Drumlins Rock

    The elephant is still there Brian, the debt problem has to sorted before you can even guess at the future.

  • Mack

    Guys whatever way you have caching setup it would seem that the views provided to logged in users / not logged in users are out of sync.

    I.e. on the home page this story was flagged with 1 comment

    When I loaded the page, there were none

    Logged in

    The comment appeared

    As this is the first time I’ve logged in today & the page will now have ‘Logged in as : Mack’ up the top – the page (in it’s entirety at least) probably wasn’t drawn from the cache.

    I don’t know if you are caching pages for users also, but you should probably flush all caches for a page when it is updated / comments added..

  • JAH

    The debt might be there, but as to the future we all dead anyway!.

    Although winter is the darkest time in the soul for the Celtic mindset, I don’t see riots, battles in the streets, the army being mobilised. I see a people who’ve accepted the party is over, they’ve all got a clanger of a hangover but they will recover and thrive again.

    Only probably not by investing in property.

    What’s wrong with optimism? We are seeing entire nations being engulfed by it at present. It powers our future.

  • tuatha

    JAH – I’d like to be optimistic but what chance that FG will be any different to the previous bunch trough snouters? The only hope is that they don’t get an overall majority and there are enough Indi/SF or Labour to ensure some version at a legislature subject to debate & moderation as suggested by Fintan O’Toole. Oh look, Porcus Aviatrix

  • joeCanuck

    says that Celts have a nasty habit of extrapolating both good and bad times for ever
    An optimistic, entrepreneurial spirit emerged that will not be crushed by a few years of recession.

    Many say that this election will make no difference. I don’t think that that is necessarily so. A change of government may pick up people’s spirits and reenergize them.

  • Mark

    Yes Joe I agree , a clean emotional slate ….

  • Joe canuck. People might surprised how soon recovery comes back once the election is out of the way and with the satisfaction that will come after having meted out overdue punishment to the FFers, The emigration won’t be on the scale of the 50s thru 80s as Ireland is not the same country at all as then. They had a piece on newsnight last night suggesting a New Republic, and this 90 years is well and truly seperate from the rest of the country’s history

  • skibbereen eagle

    I think it is in Exodus of the Good Book that there is a reference to seven years of famine after seven years of plenty maybe we are half way through the famine years!

    Fado fado Gay Byrne on his radio programme used to regale the popululation with the mantra that the country was ‘banjackxed’ and the greatest boom the country ever experienced was only around the corner.

    All recessions end and perhaps in Ireland’s case it might be expedited by a look at the debt. It is interesting that both the Economist and the FT have doubts as to whether the current debt levels are sustainable and capable of being serviced, they point our that our European friends may also have to take some pain as a country mired in long term stagnation is in nobodies interest. In the past a good dose of devaluation did the trick, what now?

  • Secret Squirrel

    Mack,
    I’ve noticed wee technical anomalies similar to the one you’ve mentioned ( eg. sometimes a thread might show 10 replies from the main page, but the article itself might only show 7 or 8.) I initially suspected some posts might have been awaiting some sort of moderator intervention.
    I stand to be corrected as always, but I believe the lag might also be influenced by some ISPs caching popular content at their own servers: that too would account for the ‘problem’.

  • Mack

    It’s not commemts awaiting moderation – it’s happened few times and i can see all the comments in the bloggers admin app. Isps shouldn’t be caching dynamic content. The http headers can be used to indicate a page shouldn’t be cached. Besides logging in seems to solve it and it doesn’t happen in other sites…

  • Secret Squirrel

    The http headers can be used to indicate a page shouldn’t be cached
    Do you think there’s a possibility that the ISP’s software isn’t conforming to the rules and ignoring the no cache directive ?
    Merely a thought.

  • Zig70

    I reckon this downturn still hasn’t felt its bottom for the man on the street. The stock market usually picks up and then trickles down to us pro’s about 6months later (In my humble opinion). There’s a lot of people just getting their redunancy. I just hope the UK economy falters long enough to burn the Conservatives. My Monaghan habiting Bro expressed the same opinion tonight about FG.