The state of Ireland's economy

[Hassled]

Scary article in the Guardian today here.

It says "Ireland's government has slashed public sector spending by 7.5% of gross domestic product with a series of drastic cuts this year: public sector pay by 15%, child benefit by 10%, unemployment benefit by 4.1%. Another ?3bn will be removed next year, a total of 10% of GDP over three years: these measures are equivalent to the British government slashing its budget not by the £6.25bn planned by George Osborne in 2010, but by an incomprehensibly gigantic £150bn."

I knew things were bad (spent a big chunk of my childhood in Dublin, have a lot of family there) but I hadn't realised how bad. And while everyone seems to agree that the blame lies with the banks, corruption and developers, there doesn't seem to be the anger that you'd get in other countries - in the UK even. Why?

Don't know, but surely it would be disingenuous not to lay just a teeny bit of blame on the governments of the past decade or so. When the going was great, did they do much to curb corruption, limit the massively disproportionate weight of property development (based on debt) in the economy and pay attention to the lending policies of the banks? Don't know enough about it but the authorities are in charge and should be accountable for something.

Very interesting that there hasn't been social unrest: perhaps indicates some element of recognition of responsibility of all those who took advantage of the credit boom?

Last time we were over to see IL's in southern county Wexford, there were queues out the dole office and that was at christmas. V.sad. They have friends going bust all over the place.

There were some demonstrations in Dublin from transport workers when I was there too.

We are in nowhere near as bad a state as they are, because our economy is massive compared to theirs and was not just based around construction.

We know friends who bought 2 bed flats in Dublin for €650,000 on 100% mortgages, now worth under €400,000 (and that is being optimistic) It's f'ing annoying horrible for them.

I think there are many factors at play in the blame game: bankers, governments, consumers, press, culture of capitalism and the more-ism. No one place can take the blame, although it does make me laugh when the press try to land all the blame at GB's door for our economy. He did exactly what every other leader in the western world did..................no-one has escaped.

Oh, and nearly forgot my joke:

What's the capital of Ireland?

About €10

I read somewhere a theory which suggested the reason that there is not the same anger as there would be in England is because the famine was not that long ago historically, so Irish people are better wired to deal with hard times than the English and are more likely to try to make the best out of a bad time.

In fact I could have read it on here

It says that in the article.

Irish people aren't used to good healthcare, good pubic services etc.....its not wired in the same as it is here

Their health service is pretty dire. I said to MIL last time I was there - if something happened to FIL in the night, what would you do - and she seemed perfectly accepting of the fact that it would take an hour for an ambulance to get there......that is if it was not busy elsewhere

I am amazed there isn't more unrest. The anger is there.

lol at 10 euro

Cornsilk - it sort of makes that point in the article - that so many of the Irish can remember when things were shite before that they still expect that as the default position. But the people who grew up during the Celtic Tiger must have higher expectations, I would have thought.

lol hadn't seen the link will read it now!

Very sad and scary

I think I agree with you ladyBlahBlah.
There seems to be an undercurrent of acceptance that now we are getting back to the norm of poor public services, unemployment, emigration, etc.
As though the last 10 years were an aberration.
Historically, theer has been a grudging admiration for the "cute hoor", the opportunistic type who is shrewd enough to feather his own nest by whatever means. That may have something to do with the lack of anger against the politicians, developers and the rest.
Re the ambulance point - well, many people in Ireland live in rural areas more than an hour from a hospital. For once I will not blame the inadequate health service for something - it's a problem of geography.

x posts Hassled- will read the article now.

And lady Blahblah yes, it's another failure of our glorious nation: the lack of "good pubic services"

Although, I do remember that the amount of child benefit paid out there was totally ridiculous - if I remember rightly, nearly €1000 a month for 2-3 children

NOT means tested either

Wukter - that would be unacceptable in the UK - wherever you lived. Geography would be no excuse for an ambulance not being available and certainly not for an hours' wait

Strange thing, culture

I wish LadyBla! CB is about €300 a month for 2 kids (I think it was €320 before those cuts).

Re: ambulances, I've never known anyone who had to wait an hour on emergency help , I live about an hour from the nearest hospital but there are always ambulances and rapid response vehicles based in the local area.

I moved to Ireland 2years ago just when things turned bad (great timing I know!!), but we live in a rural area, our nearest A&E is 1hour 10mins drive away and I find this very scary but you get used to it and learn to deal with these things.

There are actually a lot of ambulance depots in local towns so you can get help quicker but they still have to drive you all the way back to A&E.

I also find it strange that people seem to get mad over money but dont seem to do anything about it really, yes there have been strikes etc but the government still carry on taking money left, right and centre, but I also feel that a lot of people didnt have money before the Celtic tiger so they are just making do with what they have got now!!

Ha ha knickknack posts crossed and we aid almost the same thing about ambulances!!

Typical MIL - exaggerating how much I would get for doing nothing if I moved to Ireland

Oh there is anger. But people are used to being angry at politicians there. I grew up in Dublin - left in the last recession when there were no jobs. Distinctly remember my dad moaning the same as now.

In the UK we will need to do £150 bn cuts in the end. There is no choice. We cannot grow our way out or tax our way out. The World economy is rapidly slowing down again as massive Govt stimulus packages have provided only temporary relief.

The European banking system is is extreme stress - especially Spain. There is a wave of bank failures about to ripple across Europe. The rescue of Greece is teetering on the edge and may not go ahead at all if the German or European court rule it illegal. The global banking system needs $3 trillion more capital to offset loses on property loans yet to be written off. No one dares talk about credit card debts write offs or sovereign bond defaults.

The US housing market is dipping into a second down leg. The UK housing market is doing the same with new mortgage applications dramatically down to a nine year low last month. The US stock market is down 11% in a month and UK down 12.5% and other countries down more than that.

Oh and there is a war brewing in SE Asia.

ah but LadyBla she's right...you would get lots of money if you were doing nothing ...dole is still very high!

Dole is just under e200 a week. That has been been halved for the under 23's.
Yes, it's high, but cost of living here is so high that it does not bring you far.

Particularly if you are someone who has been made redundant in the last couple of years, who now is still trying to pay a 100% mortgage on a shoebox an hour away from where you used to work. Still trying to pay finance on a car. Add a loan taken out on the expectation of a Christmas bonus to do up the kitchen/ go on holidays. And you have a couple of children.
Apparently the people were greedy. But you need someplace to live, and there's no security in letting in this country. So you will buy a nice 3 bed semi on a nearly completed estate. The bank offers 100% mortgage, calculated on your income including bonuses and overtime. Is that wise? Well, houses are going up by e20,000 a month - no point trying to save for a deposit, just get on the ladder before it's out of reach.
Need a car to drive the hour/2 hours into the city. Transport links are appalling - there's the nearly completed dual carriageway or a bus twice a day at odd times, no guarantee you'll be in on time for work. Plus, teh estate isn't finished yet, no amenities so there will be school runs, supermarket runs and the nearest playing fields are 4 miles away. Car it is then - You will be offered finance for this nice shiny one here. I've always wanted a shiny one - it's only x amount dearer a month, a couple of hours overtime will pay it off and it's got great resale value. Sign here.
Why not bring the kids to Disneyland? Ok, that's a bit greedy, a day trip to Salthill should do you. But...well...the DC would love it, money is coming in, we work hard, we will get the finance no problem and work is still very busy with plenty of overtime. Why not?

That's just a snapshot of a large proportion of the population.

Wukter, I agree with your snapshot of much of the Irish population. I am Irish and lived there until i was 26, left because there were no opportunities. My parents were farmers and we grew up with enough food, clothes and a roof over our heads but no money for holidays, eating in restaurants or any fancy Christmas presents. My brother still lives there and although he and any other of his contemporaries and mine who still live there mostly all participated in the boom years, now that there is no money, they are far more accepting of making do with less than i think many people here are. They're not so old that they can't remember what it was like before and although they might miss the fast cars and trips to the Carribean, they accept it's not the end of the world as well.

Wukter speaks a lot of sense.

I am Irish and have always lived in Ireland and would definitely agree that greed had a large part to play in our downfall.

We have so many friends up to their eyes in huge mortgages that they are struggling to pay because they took what the bank was willing to give rather than looking at what they could realistically afford in the long term.

Several have said in the past 'my house is worth 500,000 now' but fail to see that is only true if someone is willing to pay that for it which they certainly are not in this recession.

My DH is self employed and all his work is contract based and I am a SAHM so we haven't felt in a secure enough position to buy a house yet but the pressure we were under all along to buy was crazy. For now at least I think we have made the right decision to rent. When we are ready to buy house prices will be back to what they were before all this madness started.

I have 2 friends who always say how lucky I am to be able to afford to be a SAHM without realising the sacrifices we have made to do this.

I think a lot of it was due to the fact that for the first time people had money and were willing to pay whatever was asked for property, clothes, cars etc without thinking about worth.