Nothing Much Changes.

When I was growing up, the south was an expensive place where you were guaranteed to pay far too much for everything (especially, the adults said, drink). It was always a source of wonder how people got by given the massive unemployment. The answer of course is that they got by with a lower standard of living than was typical in the north. The boom years seemed to alleviate the problem somewhat as more and more people got work, often decently paid. The increased purchasing power of consumers was illustrated by the fact that the big international chains that had shied away from the south rushed in there. That, and the new cars and the new houses, and the several holidays a year etc for the middle classes; and it must be said many working class people too. And then there was the Euro. Unsurprisingly, the Euro provided an excuse for an outbreak of profiteering and price-hiking, but the blow was softened by the fact that the economy continued to do well. Now that the economy is in trouble it feels a lot like it used to, as anyone who has bought a pint in central Dublin recently knows all too well.

Today’s Irish Times lays bare some of the facts and figures in its report on a recent Central Statistics Office report.

IRELAND’S SOCIAL and economic highs and lows are laid bare in a new report by the Central Statistics Office charting the country’s transition from boom to bust.
They show a country in rapid transition from one of the richest in the European Union to one struggling with above-average unemployment, high costs and rising debt.
In general, the optimistically-titled Measuring Ireland’s Progress 2008 is a snapshot of one of the richest countries in the EU, peering over the cliff-face of the worst recession in living memory.

Last year, unemployment in the south was 5.2%, below the EU average of 7%. Today, it stands at 12%, above the average of 9%. But you’ll be pleased to hear that there are others worse off than us.

Still, we aren’t faring the worst by any means. The same data shows that countries such as Spain (18 per cent), Latvia (17 per cent) and Lithuania (17 per cent) rank significantly higher than us, though we’re catching up fast.

I don’t know about you, but I’m very pleased to hear that the economy of the south now does well by comparison with two of the Baltic states. This is a long way away from the south-as-model-for-developing-countries rhetoric that has dominated public discourse for the last decade and more. And here are more reasons why that confidence has been well and truly lost.

Government debt has also been heading in the wrong direction. While it had fallen to 25 per cent of gross domestic product (GDP) – the total value of goods and services – by 2007, within the space of year it ballooned to 43 per cent.
In addition, the public balance, which was in surplus in recent years, fell to minus 7 per cent of GDP last year, the worst in the entire EU.

But in an attempt to find a silver lining, the paper reports that

There were some small crumbs of comfort. Many other countries, for instance, had higher rates of government debt, such as the UK (52 per cent), Germany (66 per cent) and Italy (105 per cent).

Debt is an important point in the south at this time, one that has been discussed by WBS, Michael Taft and others at some length. And, thanks to Dr. X on this thread, we can quote the wise words of one Dick Cheney on the matter.

Reagan proved deficits don’t matter

Looking at the figures for the UK and Germany above, we can see the truth of Cheney’s remark. IF you have an economy that has some strength in depth (as we are constantly told we have) and a government that hasn’t hitched its entire financial future to the fate of incompetent bankers and speculators (ahem), then debt is a more than manageable problem that needn’t result in brutal cuts to your workforce and the decimation of your health, education and social security systems. As we know, the discourse of the right on this issue has much more to do with ideology than with facts.

The report points out that Irish educational achievment remains high, and that life expectancy has increased. However

Even with all the wealth that accumulated over the Celtic Tiger years, poverty remained a major issue.
The proportion of the population at risk of poverty – which equated to an adult living on an income of less than €229 a week – in 2007 was 18 per cent, the ninth highest rate in the EU.
The Czech Republic and the Netherlands had the lowest at-risk-of-poverty rate (10 per cent), while Latvia had the highest (21 per cent).

8 places separate the south from Latvia, but look at the percentage points. Only a three percent difference. Note too that this figure is about adult and not child poverty, at which point the proportion grows. That the south was in 2006 estimated to be the second richest country in the EU on GNP per capita and yet was in the bottom third for being at risk of adult poverty in 2008 is another reminder of the extreme economic disparity of the boom years.

But to go back to where we started, the cost of living.

Despite rising unemployment and debt, Ireland remained the second most expensive place in the EU during 2008, at 25 per cent above the average.
Only Denmark was more expensive, with prices at 38 per cent above the average cost of living.

So this is where neo-liberalism has got us. Massive unemployment, enormous personal and public debt, and ever-increasing prices. Like I said, nothing much changes.