Ireland was the Celtic Tiger of the ’90s but has been reduced to a mewing kitten. Like so often in the past for so many, the answer is emigration. Karen Kissane reports.
EVERY culture has its own spectre of hardship, says economist Alan Barrett. For Germans, it is the hyper-inflation of the Weimar Republic and its destruction of families’ hard-earned savings. For the English, it is the rationing during and after World War II, which left some in that generation still prone to hoarding every time headlines cause alarm. For the Irish, it is landlessness.
Their folk memory turns on the stories of the potato famine of the 1840s, when starving people were evicted from their homes by English landlords and died by the roadsides with grass stains around their mouths.
Even today, says Professor Barrett, of Trinity College, Dublin, “in the social collective consciousness, losing your property and eviction are the worst things that can possibly happen.”
This has led to a national preoccupation with property ownership, agrees Professor Piaras Mac Einri of Cork University, “We have an obsession with land. Owning your own land is the biggest thing you can do.”
Which partly explains what has happened with traditionally frugal, hard-working Ireland. In the 15 years to 2008 the country boomed, proclaimed as “the Celtic Tiger”. On a surge of prosperity and optimism, and turbo-charged by low interest rates, Ireland spent billions building roads, luxury hotels, golf courses, and a gleaming, futuristic, €600 million (A$783 million) international airport, T2. The Irish also borrowed heavily to buy into a feverish local property market.
Barrett, who is on secondment from Ireland’s Economic and Social Research Institute, says: “If you asked anybody what was the big benefit of the Celtic Tiger, I think a lot of people would have answered that for the first time ever, if you were born in Ireland you could assume that you could live and work in Ireland for the rest of your life.”
But the Celtic Tiger is now a mewing kitten. Last month marked the first anniversary of Ireland’s humiliating bailout by the troika of the European Central Bank, the European Commission and the International Monetary Fund, without which it would be bankrupt. Ireland has also just suffered its fourth consecutive austerity budget, this time one that provides an “adjustment” of
€3.8 billion through increased taxes and slashed spending. It follows cuts of €4 billion last year.
The Irish are talking about unemployment tripling to 14.5 per cent with 450,000 now jobless, about the way houses have lost half their value and about the big cuts to salaries and social services that make life harder. But there is another painful Irish spectre that is not getting as much airplay — forced emigration.
Emma and Eoin Monaghan are typical of those hardest hit by the crash. They have regretfully decided that they must leave the country if they and their children are to have a future. He is 35 and works as a thermal insulator; she is 29 and works part-time as a make-up artist. They have two children, five-year-old Jamie and baby Maleah, nine months, and live in a Celtic Tiger-era housing estate at Donabate, on the edge of Dublin.
They did what they thought was the responsible thing and bought a house before they had children, at a time when prices were rising fast, because they feared they might not get into the market at all if they dithered.
“The day we actually bought, there was a big queue,” Emma says. “They said if you didn’t bring your deposit within 24 hours you would lose your place. We were so frightened that we wouldn’t even get on the property ladder.”
They were conservative, for the time; they took a mortgage of 100 per cent, when all around them people were borrowing even more than that to add on a car, or a renovation. Between 1998 and 2008, Irish banks borrowed €300 billion to fund loans for property speculation, which amounted to 2½ times the country’s gross domestic product.
In 2008, the Irish government offered to guarantee six banks, thinking they had a temporary liquidity problem. But the banks were close to insolvent, and the guarantee has cost the Irish people many billions more than expected.
Now that the property bubble has burst, with busted banks close to being nationalised and the nation crippled by a ruinous €144 billion debt, Emma and Eoin are left with a house that is valued at €150,000 less than they paid for it. About 100,000 Irish families are in trouble with their mortgages, and most of them are in negative equity too, which means they can’t sell and start again. One senior economist estimates that 25,000 families could lose their homes by 2013.
Construction employed 286,000 people at the height of the boom but that has shrunk to only 100,000 now. “I have never been out of work but now it’s looking likely,” Eoin says. “I was with this firm for nine years and it went bang.” He has contract work that will see him through to Christmas but after that, nothing.
The Monaghans know at least five families in their social circle who are emigrating; three are already gone. “People are panicking now; they are just jumping ship,” says Eoin. Emma adds: “We both have work at the moment, but we are saying we should go before it gets too bad.” Their preferred destination is Australia, which Eoin loved when he worked in Sydney several years ago.
It would be difficult to leave their families, Emma says, “But we have got to think of the kids and their future. There really is nothing, no kind of opportunity here.”
About 40,000 Irish nationals have left the country in the 12 months to last April, along with 36,000 people of other nationalities.
“Emigration” is a dirty word in Irish politics. Politicians prefer to paint it as young people spreading their wings. “It’s not really emigration if you want to go and experience Bondi beach,” Irish Finance Minister Michael Noonan tells The Age.
It is true that because it is a small country (Ireland has only 4.5 million people), many voluntarily travel to see the world or improve their CVs. Karen McHugh migrated to Germany for several years when only three of her class of 250 engineering graduates found jobs in Ireland. “Irish people . . . know that we don’t have enough of a population to sustain ongoing growth, so people get used to travelling for work,” she says. “It’s part of our psyche.”
McHugh is now back in Dublin and managing director of technical recruiting firm JobContax. She finds engineers and other specialists for overseas projects, including several in Australia.
“I came back because there was work here again,” she says of her return. But now she sees even highly qualified, experienced people scrabbling for a job. When her website was mentioned on the national broadcaster, it received 4000 hits each day of the following weekend.
“People are sick of the government, they feel they are being screwed over taxes — a lot of people have had enough,” she says.
But they also feel anguish about family separation.
“People who have got elderly parents — that’s the biggest wrench.”
Emigration has long been the Irish escape at times of greatest hardship. More than 2 million people fled the country during the Great Famine of the 1840s; half a million in the 1950s; and 200,000 during a downturn in the late 1980s. The Irish diaspora — of emigrants and their descendants — now vastly outnumbers the Irish at home and is estimated at more than 70 million people.
Critics say this history has taught Ireland’s policymakers to rely, like Aesop’s lazy donkey, on a lightening of the load through emigration whenever times get tough. A study of 90 young unemployed people by the Youth Council of Ireland this year found that 70 per cent thought they would emigrate and many believed the government was relying on it.
“It’s a handy way for them to export the problem and to cut the costs [of welfare payments],” says one. Another says: “I am sure it is built into the economic projections for the next five years because there doesn’t seem to be any meaningful policies being developed to help young unemployed people.” Youth unemployment is running at 24 per cent.
Macdara Doyle, a spokesman for the Irish Congress of Trade Unions, says: “The jobless figures have not risen to Spanish levels [where youth unemployment is 40 per cent] because people are leaving. We’ve had [whole] classes of newly trained teachers heading to the southern hemisphere, of newly graduated nurses being recruited en masse by [Britain’s] National Health Service. And thousands more are leaving quietly.”
Minister Noonan says three out of five of his children are abroad, “and none of them would regard themselves as emigrants . . . It’s certainly not a matter of policy for the Irish government [to rely on emigration]. It’s a consequence of the recession.”
Professor Mac Einri, director of the Centre for Irish Migration Studies at Cork University, says there is forced emigration and that it is a political safety valve, as well as “a declaration of the failure of the independent state. We haven’t managed to create an economy that works in a way that creates jobs for these people. There’s a huge sense of inchoate, subterranean bitterness here”.
Noonan says many who leave will be back, and Mac Einri confirms that about half of those who left in the 1980s later returned, bringing with them the skills to start Ireland’s own software industry. Google and Twitter have set up large bases in Ireland.
He points to the nation’s other strengths, which compare well with the turmoil of its bailout companion Greece: a young and well-educated workforce, excellent infrastructure, social and political stability and the ability to collect taxes effectively. Indeed Ireland has obediently swallowed the troika’s bitter medicine of austerity and is the poster child for bailout nations.
BUT, while exports of many kinds are doing well — Ireland produces the entire world supply of Botox — the domestic economy is flatlining because consumers are too frightened to spend.
It is a struggle for Ireland to get back on its feet given its huge interest bill. Even the tough-love Noonan, who has overseen the budget cuts, says Ireland needs a “haircut” to reduce its debt. Economists warn privately that the current figures would mean austerity for at least 10 years, strangling domestic growth.
And then there is what one senior official calls “the mood music” of the euro-zone crisis. “We are sitting here doing our best but if the whole eurozone collapses, Ireland is completely screwed,” says Alan Barrett.
A recent report from Ireland’s Economic and Social Research Institute warned that Europe faced another Great Depression if it did not resolve the crisis, and that Ireland’s forecast pick-up next year had now reversed, with a prediction of another 22,000 unemployed.
Emma and Eoin Monaghan don’t need that warning. They see emigration as the only way they can carve out choices for their family. “We are trying to take control of our future, rather than just existing,” Emma says.
If they can work their way through the bureaucratic tangle, they will soon be farewelled at Ireland’s gleaming new airport by tearful mothers like one featured recently on an Irish TV documentary. She hugged her daughter and her two grandchildren and watched them go through the gates to a new life in Canada.
“I just feel we are exporting our kids,” she said, wiping her eyes. “We are bringing them up, educating them and then giving them away. My grandchildren too — it’s two generations.”
For her and many like her, Ireland has again become, in the bitter words of writer James Joyce, “the old sow that eats her farrow”.
Karen Kissane travelled to Dublin as a guest of the Irish Government.First published in The Age.