Tuesday 3 December 2013

Irish Eyes Smiling Again

OUR 3,000 th POST

Back in Dublin after a 6-month gap - and there are striking and visible signs of turn-around to accompany the departure of the Troika.

Yes, after 3 years of their stern bail-out regime, the hated Troika have almost packed their bags.  "The Troika has done more damage to Ireland than Britain ever did in 800 years," said David Begg, head of the Irish Confederation of Trade Unions.  Well there you go, mate: but in a show of bravado the Irish have decided not to have a stand-by credit facility when the bail-out comes to an end a few days before Christmas.

And just hours after all this was announced, the Irish government felt able to call a halt to the big asset sale that was one of the planks of the recovery programme.  The supply business of state gas company Bord Gais had been on the block: but they only received low-ball bids - notably from Centrica, always in the market for fire-sale opportunities - and have decided not to bother

The feeling is very much of a people less crushed than they have been for quite a while.  And there are plenty of visible indications of a turn-around.  More traffic on the Dublin streets (though not yet back to the permanent gridlock of the manic Celtic Tiger years); Boris-type bike-racks being installed everywhere, and digital indicator-boards at bus stops.  In a short walk through a scruffy area just south of the river I encountered two brand-new, well-patronised gyms, and a very up-market new kitchen showroom.

And yes, of course, the property market has turned.  Ireland famously saw one of the more dramatic European bubbles expand and burst: for several years property price small-talk replaced the horses as the main topic of conversation - both on the way up and, bitterly, on the precipitous way down.  The number of high-profile bankruptcies and criminal prosecutions that followed in its wake was impressive, day after day in all the papers.

Now, glancing at the property pages over breakfast I see an unremarkable modern 5-bedroom house (southside) at EUR 2.75 million.  And EUR 835 k asked for a 3-bed terrace,  - "even if it is on the northside" as the blurb endearingly admits.

It's not all over yet.  The non-sale of Bord Gais, ditto Aer Lingus and state-owned forestry properties leaves them with a funding gap of several billion.  And in a feisty festive move, employees of the state-owned electricity company ESB are threatening to have the Christmas lights off across the country in a strike over the funding of their pension plan.

And then there was the narrow failure to beat the All Blacks ten days ago, which has everyone down in the mouth.  But hey, that was a glorious and spirited effort.  Probably a metaphor, too.  Fair play to the lads - hope they remember who their friends were.



Ryan said...

IMF nominal GDP per capita (2012):

Ireland $46,000

UK $39,000

So what do we make of that?

SameNameAsYesterday said...

Ireland did the coke, drank the booze, had a heart attack and fell from a 5th storey window.
Now its been transferred to hospital and stabilised. It is conscious but remembers nothing of the incident.
ND pops by and observes that a little toot or a nip of something might just take the edge off....
Some people never learn.

Nick Drew said...

Ryan - their labour costs are higher too ! it's easy to harbour misconceptions based on very out-of-date assumptions

SNAY - but I assure you I have no misconceptions about the nature of this 'recovery'

that said, in the pragmatic world of messy economic reality, perennial human short-memory syndrome does actually help to get the wheels turning again: as they say about women - if they remembered how painful it was, they'd never get pregnant again

Budgie said...

"hope they remember who their friends were."

Well, (some of) the Scots don't, so why would the Irish? England's always good for a kicking.

dearieme said...

Surely (some) Irish did far more damage than the Troika? If you run your whole country on a corrupt crony-gangster basis, you must expect trouble.

CityUnslicker said...

well i am amazed we have reached 3,000...and the quality of the blogging improves as our readership numbers do not.

I will take quality over quantity on both counts every day.

intersting times!

ireland will regret next year being so brave, they are not going to make it back to international markets in a hurry when they refuse to sell off the assets they need too. I see Portgual and greece have the same dilemma.

rwendland said...

> their labour costs are higher too

Their national minimum wage is amongst the highest in the EU, considerably higher than the UK.

Eurostat work-out the NMW gross Euros per month (early 2013) as:

1874.19 Luxembourg
1501.82 Belgium
1469.40 Netherlands
1461.85 Ireland
1430.22 France
1264.25 United Kingdom
752.85 Spain
683.76 Greece
565.83 Portugal
392.73 Poland
158.50 Bulgaria
157.50 Romania

(Germany has per-sector MW rather than NMW)

From these stats high NMW does not seem an automatic impediment to recovery, nor low NMW a great help to recovery.

CityUnslicker said...

rwendland - i tried looking up the Big mac index to lay over the top, but they have given up in the euro Area which is a shame; that would add some value to know what real purchasing power was. Countries with higher imports are more expensive to live in. Your number do a super job of showing the differential wage, but we need PPP statistics to see if there is more of a correlation than at first view.

Electro-Kevin said...

Budgie beat me to it.

The English ARE always good for a kicking.

They're going to miss us when we're gone and there is nothing but favelas all down places such as Hampstead Heath and Streatham Hill.

We're surely the most un English country on the planet, are we not ?

Blue Eyes said...

"Bord Gais"

Insert obvious Tom Daley reference.

I don't know about Ireland or Britain - this recovery seems to be full of contradictions - but maybe Dublin feels a bit like London does at the moment, a tentative optimism based on not much? It sounds like Dublin house prices may not have collapsed as much as in-fill bungalow estates in outer Galway did. See Leicester for a comparison.

As for 3000 million quality posts, congratulations. Maybe you should have a Christmas drinks to celebrate or something.

Will Williams said...

Thanks for all the interesting blogs.

Nick Drew said...

@ Xmas drinks (+:

@ Tom Daley (+:

(actually, it's pronounced 'gaarsh' or even 'gosh')