Last night, officials from the International Monetary Fund, the European Union and the European Central Bank arrived in Dublin. This morning they will begin creating a bailout loan and a forced cost-cutting program, expected to cost about $81,000 per household. As unfortunate as an economic crisis such as this would be for any nation, for Ireland a European bailout comes with humiliating historical ironies.
Already, a Brussels official referred to the loan as the “Oliver Cromwell package”, referencing the British Lord who invaded Ireland in 1649 and, as The Globe and Mail points out, “it is a particular badge of dishonour, for a people who marched under the banner ‘neither King nor Kaiser’ in the last century, that Britain and Germany are extending their hands most generously”.
But what other choice does the country have? The drastic cuts implemented by Taoiseach Brian Cowen were not enough to calm their European Union partners, a financial brotherhood which first much-benefited the small emerald isle during the ‘Celtic Tiger’ boom. That boom is a distant memory. As The Globe summarizes, “Ireland’s banks are close to insolvency; an estimated 200,000 homeowners—affecting about a fifth of the country—face default on their mortgages; unemployment has topped 13 per cent and the government’s budget deficit has reached 30 per cent of GDP, largely because of bank bailouts.”
But all of that sounds very theoretical. Weren’t you just in Dublin, Max? What was it like actually living there?
The most unnerving thing about an economic downturn is you can’t always tell.
Sure, I had trouble finding a job. Luckily, I was eventually hired at a Starbucks at a posh mall right outside central Dublin. And storefronts in downtown, which would be snapped up in an ever-expanding city like Toronto, sat oddly vacant and melancholy.
But human beings are funny creatures, set in our ways and slow to adapt to shifting environments. There are countless places I would have seen more economic devastation if I had lived there, but living in latte-sipping Ranelagh (sort of like the Annex of Dublin) and working at Dundrum Town Centre, serving frappuccinos to wealthy women, bangled arms weighted down with shopping bags, and their spoiled daughters (speaking with a distinctive Irish-Valley Girl swoopy accent), you could almost believe that everything was going swimmingly.
I venture to add that, as terrible as the American economy is, you would get a very skewed view if you lived in New York.
I venture to add that I have a skewed view of Canada’s economic health living in Toronto.
Of course, this Marie Antoinette distance from reality can’t last forever. After having a labour shortage and welcoming in my Eastern European, Asian and Middle Eastern Starbucks co-workers (“The Irish don’t want those jobs,” a native Irish person told me), the government is scaling back on who gets in. And Starbucks closed about six locations in the greater Dublin area, as good an indication of any that people are cutting expenses and guarding their money.
If I knew more about economics, I would draw a lesson about not letting banks run amok with mortgages, not letting housing developers build like wild men, not letting governments go in to debt because they bizarrely and ahistorically believe economies continue to grow indefinitely.
For now I’ll just sign off with the hope that when Ireland pulls itself (or is pulled out) of this marshy economic quagmire, that the lessons hard-won will help the sun shine again.