Money Overview

Go to your toilet. Flush it. Watch the whirlpool gather force and momentum as it heads for the drain.

That's the Irish economy as we head through 2009.

So, when you hear someone say Ireland's economy is in the toilet, you know you're talking to an optimist who believes we're still in the bowl.

The Celtic Tiger

The Irish economy was the fastest growing economy on the planet for many a 1990's year, at points growing at a clip over 12%. An economy is considered exceptionally healthy when it passes 3% annual growth. This huge swell of prosperity led observors to compare Ireland with the 90's Tiger economies of Singapore and Taiwan. Ireland was "The Celtic Tiger."

The 90's were a time of real economic growth spurred by low wages, membership in the European Union and tremendous productivity gains as computers and updated business methods spread.

Following 9/11 there was a pause, but then began Tiger Two when the Celtic pussycat again started rustling about in the economic garden.

And 'twas Tiger Two that sunk us.

A Sea of Debt

When Ireland joined the Eurozone, it gave away the most powerful weapon for restraining inflation - the ability to set its own interest rates.

The benefits for Ireland of being a Euro country should have offset this disadvantage. It didn't, because the governing party was notoriously dependent on builders and developers for its financial support.

The one remaining tool in the government's arsenal - requiring high capital requirements of the banks - was jettisoned. Construction and housing became the driving force of the economy.

Speculation was rife. The banks lent hundreds of billions of Euro to land speculators. The madness was encapsulated in the tale of an acre and a bit of land in Dublin with a nice house on it that was purchased for 53 million euro. The house was to be torn down, plans for an apartment complex and three smaller homes were sent to the planning department. The planners looked at these totally unsuitable developments for a quiet residential area and nixed the idea.

Someone lent these speculators the money for this stupidity. Who did that?

Incompetent Avarice

Well, to my surprise, I loaned these fools the money.

You see, the banks got in so deep with such tomfoolery that when push came to shove, they folded. So, I and all my neighbours are now on the hook to bail out the banks, to recapitalise them and keep the developers from ever having their loans called in.

Ireland's total debt in 2004 was under 500 million Euro. In four years it soared to nearly 2.5 trillion - a fivefold growth. This was the fastest debt growth of any society, any time, anywhere. A planetary, historic first!

It wasn't only the banks' favoured speculators who were showered with largesse. Credit cards rained from the sky, consumer debt soared and young couples stood in lines to hock their futures to builders.

The Government

Even worse, government budgets rose 50pc in the same period. From 40 billion, the government's annual obligations rose to 60 billion.

How did the brilliant overseers of government spending propose to pay for their spendthrift ways? They based everything on the premise that the good times would roll on forever. A tax on buying houses came to underpin the national budget.

In 2006, more than 90,000 housing units were finished. Compare this to the 13,000 a year not much more than a decade earlier and you understand the flush of money that coursed through the economy in the noughties.

Enter the credit crunch. Exit Lehman Brothers.

Bye bye Celtic Tiger!

Fear Stalks the Land

As we head through 2009, fear abounds. The only people not afraid are the overpaid higher-ups in the public service - the guys and gals actually running the show.

Every action the government proposes to deal with the crisis takes direct aim at the poorest and most vulnerable. They are always careful to spare the big boys, the banks, the highly paid. Everything they do gets us in deeper.

The most monumentally incompetent government in Irish history is in charge as I write. When bank fraud is unearthed, the government does nothing. As hundreds of thousands of jobs are shed, the government ministers mumble about task forces. Key and critical reports aren't even read by the Finance Minister.

Hopeless.

We Shall Overcome

Just because mismanagement has left the Irish temporarily down doesn’t mean the country won’t bounce back. Let me quote from my newsletter.

Core strengths remain:

A worldwide diaspora of 70 million people identify themselves as Irish.

 

Ireland has the finest grass on the planet and the beef and lamb that go with it. Farm exports earn more than computers and pharmaceuticals combined.

 

The island boasts an undeserved, but potent image, as a ‘green’ country.

 

Irish democracy is stable – perhaps too stable!

 

Crucially, we are members of the European Union – if we don’t risk being sidelined by voting down the Lisbon Treaty again.

 

The work force is young, well-educated and English speaking.

 

An entrepreneurial culture makes it easy to set up a new business.

 

Culturally, the Irish are renowned for their music, literature, history – and pubs.

 

Remaining reasonably strong industries include pharmaceuticals, medical devices, optical devices and programming/IT. Exports of food and beverages – beef and alcohol – are solid.

 

All the new roads, port facilities, expanded airports, electric grid upgrades, better insulated homes and brightly painted towns are lasting legacies of the Celtic Tiger.

 

The Irish are friendly, welcoming and fun.

 

The place is truly lovely.

The Vacation of a Lifetime

One reason for Ireland's predicted economic rebound is its productivity. A United Nations report states that the Republic boasts the third most productive workers in the world. Partly that's because the Irish work longer hours each year than most of their European counterparts - some 1,668 hours. This is exceeded only by the US, Finland and Portugal.

Unlike the serfs of the US economy, however, all Irish workers enjoy by law 4 weeks of paid vacation per year. I compare this to the wage slavery of many of my American friends. They earn more per hour than their Irish counterparts, but get only one or two weeks of vacation per year to enjoy it.

Buyer Beware

In this section I've tried to answer questions concerning money, taxes and prices in Ireland. I am not a trained accountant, economist or self-made millionaire. My economic advice should be handled with care. So, I'll mostly try just to survey those questions of greatest concern to Irish immigrants. Expert advice should be sought when it comes to your key financial affairs.

Statistics

Ireland takes a census every five years. Some of the questions in it are nosy and snoopy and none of the government's damned business! But, what interesting results! Here seems as good a place as any to link you to the Central Statistics Office where you can get population and economic statistics enough to make a math professor swoon.

Salary Comparisons

Check out the Salary page.

Banking

For information about opening a bank account, transferring money to Ireland and an overview of all the key banks, click here.

Pensions

Do you qualify for an Irish pension? What taxes will you owe on pensions transferred from abroad? Click here.

Social Security Payments

You can arrange to have your Social Security/Social Welfare/Pension checks delivered to you almost anywhere, even direct-deposited on your behalf into many banks around the world. Check with your country's appropriate agency for the arrangements that are available. The key point to understand is that, almost surely, you do not need to maintain an address overseas to receive Social Security and similar payments.

Images in This Section

A money section, I'm thinking, should focus the mind on the desirable goodies that moolah buys. So, this section is filled with photos of the Irish countryside. Those of you preferring to stare at €1,000 notes should send me a few for scanning and I'll be happy to oblige.