The Celtic Tiger starts to stir: Is Ireland's economy really back on the economic track?

Ireland has said it will become the first eurozone country to exit an international bailout

In the lobby of a shopping centre in Kildare, a sign advertises a second-hand wedding dress for sale, along with three matching flower girl outfits. It is perhaps, an accepted a sign of the times.

Several of the units in the small centre are unoccupied. Two minutes’ walk away in the local town square, several businesses have closed, including clothing shops which found it difficult to compete with a major factory discount outlet on the edge of town. With three supermarkets within 15 minutes’ walk, the shopping centre is fighting hard for customers.

Kildare was a typical Celtic Tiger boom town. Once plagued by the constant trundle of articulated trucks through its main street, it was transformed in 2003 when the main Dublin-Cork motorway opened, relieving it of the traffic chaos that made it a bottleneck, and attracting young Dublin couples fleeing the rocketing property prices in the capital 35 miles away.

Then came the crippling recession, a slump in the price of those houses that just a few years earlier had been such an attractive option for those young couples, and austerity measures that many argue have put the Irish economy back by years.

Since 2008, the Irish economy has been stymied by a lack of growth and a lack of investment. Its young people attempt to leave for brighter opportunities, or stay to a very uncertain future. But now, for the first time in years, some Irish businesses are optimistic about the future. Fergal O’Brien, the chief economist at the Irish Business and Employers’ Confederation (IBEC), says jobs are finally being created, he explains, and although the next two government budgets will include further cuts in public spending, the cuts will not be as deep as previously.

In the medium to long term, he expects the annual growth rate to return to 3 per cent or more. “The budgets should take about 1.5 per cent out of the economy, but we’ve had budgets that cut twice as deep as that, and after 2015 the budget cutbacks should be completed,” he says.

In particular, export-led businesses are well placed to exploit a recovery in international sentiment, he says. He even sees room for optimism in the construction industry, which reported 8,000 new housing starts last year.

“We will never get back to the level of 80,000 starts we saw at the peak,” he says, “and we wouldn’t want to. But employment growth is returning, and we should be able to get to a level of about 30,000 starts.”

Mr O’Brien’s view received official endorsement at the weekend, when the Taoiseach, Enda Kenny, announced that in mid-December Ireland would become the first eurozone country to exit an international bailout, and could do so without further financial assistance from other European countries.

“There’s still a long way to go. But at last, the era of the bailout will be no more,” Mr Kenny said to loud applause a party rally on Saturday.

“Two years ago, I addressed the Irish people and said that I wanted to be the taoiseach who would retrieve our economic sovereignty and independence,” he said. “This goal is now within our grasp.”

Other economists have cautiously welcomed the news, but warn that despite the thawing of the economic ice, there is still much to do. “Ireland had gone through a balance-sheet recession of unprecedented proportions,” says Constantin Gurdgiev, an economist and academic at Trinity College Dublin. “Given the severity of Ireland’s crisis to date, we can expect under normal conditions a recovery period of subdued growth and continued pain.

“Perhaps we will be able to put in place the right set of reforms. So far we are not really there yet, but we can get there – that’s possible.

Mr Gurdgiev praises export-focused domestic companies, which compete with such multinationals as Google to attract talented graduates, as “better on average than the big multinationals because they don’t have the benefit of tax arbitrage. They have to operate on a basis of pure competitiveness”.

But he says the domestic economy is still shrinking, as is the public sector, and the export sector “is too small to carry the entire country on its shoulders.”

One example of the new Irish economy is the so-called Web Summit, which began in the midst of the recession in 2009 as an event for 200 people. It has grown to become Europe’s biggest technology conference with 10,000 people attending and 950 start-ups from more than 90 countries exhibiting.

The event’s chief executive, Paddy Cosgrave, says: “This year we have CEOs of 199 private technology companies that have raised $5.9bn [£3.7bn] of funding attending the event as well some high-profile people speaking in Dublin, people from the World Economic Forum, Evernote CEO Phil Libin and Skype founder Niklas Zennstrom.”

Last weekend the IMF published a report on Ireland’s progress. It might be summarised as “A lot done, more to do” – the election slogan of then-governing Fianna Fáil party at the height of the Celtic Tiger boom in 2002 – with its warnings about the continued fragility of the banking sector and the need to stick to government commitments to cut spending.

Ahead of the release of the IMF report, ministers pointed to declining unemployment, which dropped to 13.1 per cent from its mid-recession peak of 17.3 per cent, even if the figures are helped by the almost 200,000 people who have left the country since 2008.

Some of these economic migrants are now planning to return. Aileen Donegan, from the Dublin suburb of Clondalkin, works in Strasbourg with the No Hate Speech movement, a project supported by the Council of Europe, but she expects to return to Ireland early next year.

“I really miss home. It’s more than likely I’ll be back next year,” she says. “I wasn’t working before I headed off. I had just finished an internship.

“But I do want to get home if I can, I really miss Dublin. It’s crazy – I hadn’t planned on living abroad at all.  There was nothing happening in Ireland, there was nothing happening where I was at the time, nothing related to what I wanted to do in life, which is in journalism. It just wasn’t available so I decided to take my chances and leave.”

Ms Donegan is only one among many, but her intention indicates, at least among the expat community, that the fear created by the economic meltdown of 2008 is receding. There is a long way to go, and the Celtic Tiger may morph into something more akin to a domestic cat, but it could just be that the worst is over for Ireland’s economy.

News
Russia Today’s new UK channel began broadcasting yesterday. Discussions so far have included why Britons see Russia as ‘the bad guy’
news

New UK station Russia Today gives a very bizarre view of Britain

News
people
News
people
Voices
Left: An illustration of the original Jim Crowe, played by TD Rice Right: A Couple dressed as Ray and Janay Rice
voices

By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
Arts and Entertainment
Hand out press photograph/film still from the movie Mad Max Fury Road (Downloaded from the Warner Bro's media site/Jasin Boland/© 2014 Warner Bros. Entertainment Inc.)
films'You have to try everything and it’s all a process of elimination, but ultimately you find your path'
Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on Pottermore site this morning

News
people

Top Gear presenter is no stranger to foot-in-mouth controversy

Arts and Entertainment
Keira Knightley and Benedict Cumberbatch at the premiere of The Imitation Game at the BFI London Film Festival
filmsKeira Knightley tried to miss The Imitation Game premiere to watch Bake Off
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Mobile Developer (.NET / C# / Jason / Jquery / SOA)

£40000 - £65000 per annum + bonus + benefits + OT: Ampersand Consulting LLP: M...

Humanities Teacher - Greater Manchester

£22800 - £33600 per annum: Randstad Education Manchester Secondary: The JobAt ...

Design Technology Teacher

£22800 - £33600 per annum: Randstad Education Manchester Secondary: Calling al...

Foundation Teacher

£100 - £125 per day: Randstad Education Chelmsford: EYFS Teachers - East Essex...

Day In a Page

The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes