The year the sun came out – for some
Ireland’s economy is starting to look like the euro zone’s comeback kid, but with such a fragile and two-tiered recovery, a happy ending may yet be out of reach
Sun spots: the weather outside was delightful. Photograph: David Sleator
Queuing to leave: mass emigration has continued. Photograph: Getty
Homelessness: on the increase. Photograph: Alan Betson
Closed for business: empty shops in Dún Laoghaire. Photograph: Eric Luke
State of the nation: Enda Kenny’s television address. Photograph: Dave Meehan
Like any nation, we tell ourselves stories to make sense of the world. And if there’s one thing that drives a storyline – be it a tawdry soap or an against-all-odds epic – it’s redemption. As any good storyteller knows, the more hideous and painful the journey, the greater the sense of joy at the end.
So the departure of the troika at the tail end of 2013 gave us a perfect narrative arc. After five years of gruelling austerity, this is the year the dark clouds began to part and a sunlit higher ground began to appear on the horizon.
We became the first euro-zone country to exit an international bailout. We finally pulled out of recession, and unemployment began to fall. Even the property market sprang back into life.
“Ireland is now moving in the right direction. Our economy is starting to recover,” Taoiseach Enda Kenny told the nation, in a televised address earlier this month to mark the end of the bailout. But there are two sides to every story. For all the positive mood music, the acid test is whether ordinary people feel any better off.
Ireland might well have been, in the view of Forbes magazine, the best country in the world in which to do business this year, but it was cold comfort to those trapped with a crippling mortgage or to families on reduced incomes struggling to make ends meet.
For many young people this year, work simply wasn’t an option, and every six minutes or so another person voted with their feet and moved abroad for work.
A growing realisation set in that there will be no return to the good old days anytime soon. Debt from bailing out our banks will continue to weigh heavily on us all for decades to come in the form of taxes and charges. Forecasts suggest all we have to look forward to is anaemic growth over the coming decade.
Worrying signs suggested that our fragile recovery is distinctly two-tiered, with some gaining ground while others are left behind. Few, then, believe this story will have a fairytale ending. There’s been too much sacrifice, too much pain, for that.
Overall, our prospects are more encouraging than they were 12 months ago. There is, we’re told, just one more austerity budget to come. Then we’ll have a chance to draw breath, we hope.
This was the year redemption looked as if it might be around the corner. And even if day-to-day reality remains bleak for many, it’s a story we desperately want to believe.
So how real is this story of recovery? If jobless figures are a barometer of a country’s economic health, there were encouraging signs during 2013 for the first time in years.
Unemployment fell below 400,000 for the first time since May 2009. But dig deeper and a detailed breakdown of the figures indicates that much of this is down to emigration. Job creation picked up over the year, but if it wasn’t for mass emigration our rates of unemployment would be significantly higher.
Levels of unemployment among young people – almost 30 per cent – are alarming. Many have been drawing the dole for a year or more and are classified as long-term unemployed. Thankfully, the rate of long-term joblessness also began to fall this year.
Job-creation figures look encouraging, although signs are emerging of a two-speed economy. While the shiny glass office blocks around Dublin’s “Silicon Docks” have seen job growth, rural areas are still struggling to cope with depopulation, shuttered main streets and poor job prospects.
Job growth is healthy in high-tech industries, but lower-skilled sectors are continuing to struggle. While employment in IT, technical and scientific areas grew, employment continued to fall in areas such as construction (down 4 per cent) and transport (also down 4 per cent).
Property prices also began to rebound. But here, too, were signs of a two-tier recovery. In Dublin the market increased by 15 per cent over the course of the year, prompting fears of another property bubble. It seemed we’d learned nothing as the madness of the boom years and a shortage of family homes resulted in some staggering price increases.