A toothless tiger

Observations on Ireland

Boom has turned to bust even more drastically in the Republic of Ireland than in Britain. Not only has the Celtic Tiger been defanged by the financial meltdown, but it is wounded, and fears for its survival in the darkening global economic jungle. A cocksure and hedonistic generation which had known only good times - the so-called Celtic cubs - is getting a small taste of the hardship and anxiety its ancestors endured over centuries. The Irish economy will shrink by up to 4 per cent this year; unemployment could rise to 12 per cent by 2010, bringing the jobless total to well over 200,000. The Hibernian housing bubble has burst and inflows to the Dublin exchequer have fallen sharply.

Faced with a gaping hole in the public finances, Ireland's premier, Brian Cowen, has set about slashing rather than boosting state spending. Free medical care for the elderly and free child vaccines were first to be targeted by the taoiseach and Ireland's VAT rate was raised before Christmas from 21 to 21.5 per cent.

Cowen has committed an inadequate e10bn to recapitalising the country's stricken banks, and he held back from even that as speculation mounted that they might be bailed out by a mysterious consortium led by the Carlyle Group, long associated with leading neocons in Washington (notably George Bushes Sr and Jr). Suddenly the ruling party Fianna Fáil's branding as the "Republican Party" has taken on a whole new meaning.

Seduced and abandoned is how the ordinary people of Ireland feel. Seduced by irresponsible banks and a short-sighted government that gave them every encouragement and incentive to borrow too much and invest in property, at home and overseas, during the long boom. Then abandoned to their fate as soon as the day of reckoning arrived in Dublin.

The years of the Tiger are over but the fat cats will be fine. The Bank of Ireland estimated in 2007 that the prolonged boom had given rise to 33,000 euro-millionaires, whose wizardry at amassing wealth is matched only by the tricks they pull to avoid sharing any of it with their compatriots.

A central thread in the history of independent Ireland has been the cunning ways in which the possessing classes have looked after themselves through thick and thin, and been ably protected by politicians who have mouthed patriotic platitudes while cynically relying on mass emigration to act as a safety valve whenever mass unemployment has threatened social discord.

Politics in post-colonial Ireland, as in post-colonial India, has been dominated by family dynasties which have regarded it as part of their rightful inheritance to hold high public office. The present finance minister is Brian Lenihan Jr. His father was the tanaiste (deputy taoiseach) during the last major slump in the 1980s, which publicly endorsed mass emigration as a solution to mass unemployment. "We can't all live on this small island," Lenihan Sr said back then, as if people were falling off the cliffs of Moher. (Mercifully for Fianna Fáil, the ruling party in a fragile coalition government, his eldest son hasn't been so stupid or insensitive as to repeat this remark.)

Mass emigration may not provide the usual convenient solution to Ireland's economic woes, because both Britain and America - the usual bolt-holes - are equally mired in what is a truly global meltdown. Moreover, the republic's population swelled hugely during the Tiger years as many emigrants returned and Ireland got its first experience of mass immigration. With natives and newcomers now scrambling for any jobs they can get, the situation could easily turn ugly.

Violent crime and delinquency were grave concerns even before the economic crash. Heroin took hold of Dublin's working-class housing estates during the early 1980s and the republic's overstretched police service expects that with the current slump, the scourge of drugs will rip through many rural communities. The authority of the Catholic Church has been eroded by materialism and a succession of paedophile priest scandals. Rampant consumption has replaced Roman Catholicism as the dominant religion, but the shiny new cathedrals of consumerism - the vast shopping malls built on the edge of all the big towns and cities in recent years - are today often as empty as the chapels.

Suddenly, and scarily, the much-celebrated Irish economic miracle is beginning to feel as fleeting and illusory as all those reported apparitions of the Virgin Mary that once had religious pilgrims flocking to Ireland's shores.

This article first appeared in the 12 January 2009 issue of the New Statesman, The destruction of Gaza