Ireland is the first eurozone country to emerge from a bailout, but it will take decades to repay the $90 billion rescue package and the country still faces economic challenges.
Overall unemployment is more than 10 percent, youth unemployment tops 25 percent and young people are leaving Ireland by the thousands to find work.
So amid the St. Patrick’s Day celebration, Here & Now’s Robin Young looks at what the future holds for Ireland with BBC business correspondent Joe Lynam.
- Joe Lynam, BBC business correspondent. He tweets @bbc_joe_lynam.
ROBIN YOUNG, HOST:
It's HERE AND NOW.
And Happy St. Patrick's Day. Washington is celebrating with a snow day. They got 10 inches today. In New York, the annual St. Patrick's Day parade stepped off briskly - 20 degrees - but without Mayor Bill de Blasio, who disagreed with the parade's ban on pro-gay signs.
Yesterday, something along the same lines happened in Boston. New Boston Mayor Marty Walsh also boycotted that parade after talks broke down over whether a gay veterans group would be included. At first parade authorities said they could but without anything signifying their status and the group declined. Meanwhile in Ireland, there might have been a little more snap to the step of marchers in the home of St. Patrick.
(SOUNDBITE OF MUSIC)
YOUNG: Sound from today's St. Patrick's Day celebration in Dublin. There's some reason to celebrate in Ireland because the country is emerging from its $90 billion bailout from the International Monetary Fund and the European Union. Unemployment is going down. There is economic growth. Is the Celtic Tiger being roused?
Joe Lynam is a BBC business correspondent. He joins us by Skype. We've had a few Skype lines today. We apologize if it's a bit shaky. So Joe, what is the mood there? Obviously it's St. Patrick's Day so the mood might be a little elevated. But in general, how are the Irish feeling about their economy?
JOE LYNAM: Surprisingly upbeat because you've got to remember what they've had is an economic collapse that lasted five years. And it's been, for many people, very, very traumatic in terms of the collapse of their incomes, losing their jobs, potentially losing their homes, and a huge loss of prestige. So what we're seeing now is a spring-like atmosphere in Ireland for the first time in five years, i.e. people are starting to spend a little bit more in the shops, buying new property - they didn't do so for five years - and starting to move up the ladder economically after the wilderness years of five years. So I'm not saying that everything is good, but I'm saying that the mood is spring-like, emerging from winter.
YOUNG: So it's sort of like an Irish spring, if you will, there. But remind us how bad it was. We were talking to Irish-Americans who are moving back to Ireland because when the Celtic Tiger was roaring and the economy was roaring, tell us how bad, you know, some of the ways of illustrating how bad it got when it collapsed.
LYNAM: Well, unemployment in Ireland was negligible. I think it was in the order of 4 percent in 2007. And there was a massive budget surplus and a trade surplus, and property prices were roaring ahead by around eight to 10 percent every year. There was a massive feel-good factor. People felt wealthy. People thought that Ireland had shaken off a hoodoo of not being wealthy, being nice people but never economically successful. And then the collapse came in 2008, and it came with a force. Property prices collapsed by 50 to 60 percent.
I know there was a massive correction in the United States in property prices, but nothing like 50 to 60 percent. Assets collapsed in value. Wages fell rapidly, not just in the private sector, which had an instant fall of wages for those who kept their job, but in the public sector - the government forced through cuts up 20 percent in the public sector, people working in hospitals and schools and the police force, et cetera.
And that is unknown in Western Europe post-World War II. Such was the austerity imposed by the Irish people simply because they were spending way more than they were getting in after the economic shock of 2008.
YOUNG: So now you have leaders like the German chancellor, Angela Merkel, praising Ireland for the way it handled the bailout even though this austerity, as you said, was unprecedented. But what does this mean that Ireland has emerged from the bailout? What financial relationships are changed or stayed the same?
LYNAM: Yeah. There is a little bit of political spin about this. Ireland no longer borrows money in emergency terms from the troika of the IMF, the EU and the ECB, European Central Bank. It no longer borrows from them. But it does borrow. It borrows from the international money markets, from other massive banks around the world. So every government around the world has to borrow. That's - irrespective of good or bad times, they borrow.
But what happened in Ireland was they had to borrow from the troika under very strict conditions, and that was perceived in Ireland as a loss of sovereignty, i.e. democratically elected government in Dublin could no longer decide what they wanted to do with the public finances because it was being decided for them by the troika of the IMF, ECB and the European Union. So that was very, very damaging to Irish pride. What happens now is we decide our fate, and they can do it without being bullied or kind of cajoled by the troika. But they still have to pay back the markets.
But strange enough, Ireland is now borrowing at its cheapest ever rate from the international global market. It's just over 3 percent. United States is not much lower than that. United States is around 2.7, 2.8 percent, and United States is, you know, AAA-rated economy. No one ever doubts that American can repay its money and is never had to go cap in hand to the IMF. Ireland is only borrowing and paying interest rates of slightly higher than that. Such is the newfound confidence in the Irish economy.
YOUNG: But still, what's going on there? Are young people leaving, as they once were, to look for work? Are people able to pay their mortgages?
LYNAM: Yeah. There's a very interesting thing happening with emigration. We all know about immigration, but emigration is the stain that the Irish had never been able to wash clean. It's been, of course, to the benefit of the United States as hundreds of thousands of Irish people emigrated to the United States and built that country in the 19th and 20th centuries. But now, in the 21st century, you have something like a thousand very well educated, third-level educated Irish people emigrating, leaving the country, taking their education and their skills and their ability with them to countries such as the United States, Britain, Australia, Germany, et cetera, et cetera. And the hope is that they'll come back. But right now, they haven't stopped hemorrhaging that young talent yet.
YOUNG: Well, Joe, we hope for Ireland's sake that that flow does reverse, people coming back to Ireland. But in the meantime, it has certainly made for wonderful St. Patrick's Days in cities across the U.S.
LYNAM: And I wish you a very happy St. Patrick's Day. We say (foreign language spoken), which is St. Patrick's Day in the Irish language. It's been the first good St. Patrick's Day in about five or six years for quite a few people in Ireland.
YOUNG: Joe Lynam, BBC business correspondent. By the way, we know you are rushing to go buy an engagement ring.
LYNAM: That is correct. I've got engaged, so I have to do that tomorrow.
YOUNG: Well, I only say this because I know she's not listening. So congratulations to you, and get on your way. Thank you so much.
LYNAM: All right, Robin. Have a lovely day.
YOUNG: Haven't given anything away.
This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.