How Ireland rebounded after Europe's debt crisis
By Stephen BeardJune 27, 2018 | 3:20 PMListen to this storyDownloadEmbedEmbed Code<iframe src="https://www.marketplace.org/2018/06/27/world/how-ireland-rebounded-after-europes-debt-crisis/popout" frameborder="0" width="100%" height="240px"></iframe>
European Union leaders gather in Brussels this week to talk about â" among other things â" Brexit and Ireland. Britainâs departure from the bloc could cause big problems for the Irish since the United Kingdom is its second-largest export market and it ships a lot of its exports to the rest of the European Union via Britain. That trade could be hampered if the U.K. fails to secure a comprehensive free trade deal with the EU before it leaves the bloc.
Such worries represent a cloud on an otherwise rather sunny horizon for Ireland. The country has recovered strongly from the debt crisis that flared up at the end of 2009, engulfing several Eurozone member states, including Greece and Portugal, that were unable to repay or refinance their government debt.
Having been one of the hardest hit by that crisis, the Irish economy is today the fastest-growing in Europe.
How did the Iri sh pull off this extraordinary turnaround? And is it sustainable?
If you want to see the Irish recovery in action, consider the case of Jillian Godsil.
In the crisis, she lost her home, her marketing business, her marriage broke up and she went bankrupt.
âI never contemplated suicide, but I felt that total absence of hope â¦ total absence â¦ that dark, dark pit,â Godsil said.
Today, sheâs in a very different place. Sheâs brimming over with optimism, enthusing about her new and lucrative role marketing blockchain, the technology behind cryptocurrencies like bitcoin.
âI give talks at conferences around the world. The Middle East and Texas and Russia, Sri Lanka. Iâm going to London next week to do one. And I also act as an adviser,â she said.
Godsilâs economic revival reflects the whole countryâs recovery. Many other workers and their employers have shown the same stoicism, energy, intelligence and readiness to plug into the glo bal economy. Exporting has been a key component of Irelandâs salvation. Not to mention sheer doggedness.
âWe are a very determined race. A very determined race,â she said.
Determination has been on display at Combilift in County Monaghan, which makes innovative forklift trucks, exporting 98 percent of them. During the crisis, sales collapsed. CEO Martin McVicar took drastic action and laid off a quarter of the workforce.
âThe day we made 43 employees redundant, we actually also introduced a 10 percent salary pay cut for all our other employees. The employees were delighted to have a 10 percent pay cut so at least they still hung on to their job and their careers,â McVicar said.
That tough, remedial action saved the company and paid off for the workers. Many of the 43 employees who were laid off have since been rehired, the total workforce has more than doubled and the pay cut has been more than reversed.
The national employment picture is a lso very benign. Joblessness, which peaked at 16 percent during the crisis, is now down to less than 6 percent. Last year, the countryâs economy grew at 7.8 percent, three times the eurozone average. Danny McCoy, head of IBEC, Irelandâs main business lobby group, can be forgiven a certain hyperbole.
âIreland has been unlucky for generations and has now become incredibly lucky and has the Midas touch,â he enthused.
Thatâs not to say that Irelandâs recovery has been pain free or that everyone is prospering. Because the government spent billions bailing out the banks and then had to cut spending to the bone, public sector salaries and pensions were slashed. Public workers like nurse Sean Roben are still feeling the effects.
âI wouldnât say that Ireland today feels like the fastest-growing economy in Europe, no. Not at all. We havenât got our money back that we lost in the crash. We took a big cut in wages â" up to 15 and 20 percent. We havenât got anywhere near that back at this stage,â Roben said.
Irish households remain heavily in debt. As a whole, theyâve borrowed 66 percent more of their disposable income than their U.S. counterparts. So the Irish are particularly vulnerable to any rise in interest rates. Brexit is another headwind. But at least Ireland is growing robustly and facing all the uncertainties with much more confidence today than in the recent past.
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