Ireland’s tough road back

It doesn’t feel like a country in the grip of a lost decade, writes Peter Geoghegan, but beyond Dublin’s corporate office blocks and crowded city-centre bars lies another Ireland

Last weekend more than 50,000 people – many of them Scottish rugby fans – packed into the Aviva Stadium in Dublin to watch Ireland triumph over Scotland in the Six Nations. Erected on the site of the homely if rather anachronistic Lansdowne Road ground, the Aviva was built, in part, to show off brash, modern Celtic Tiger Ireland to the world.

Unfortunately, by the time then premier Brian Cowen opened the stadium in May 2010, the economy that bankrolled the Aviva was already on the rocks.

Today, the shining corporate offices of Google and Facebook in Dublin’s Docklands and the busy, bright young things in the Irish Financial Services Centre belie the reality that Ireland has yet to “the turn the corner”, to borrow a recurrent phrase of politicians in the lead-up to the banking crash that led the country to the brink of bankruptcy in 2008.

“The 2008 banking crisis was not caused by an outbreak of moral failure or individual weakness,” Irish historian Conor McCabe writes in the concluding chapter of his book Sins of the Father. It was structural and political forces – not “pockets of immorality” – that led to a bust of global proportions.

Subtitled Tracing the decisions that shaped the Irish economy, McCabe’s is a compelling account of the economic failings that dogged Ireland since independence, from the fateful decision to peg the punt to sterling for more than 50 years (a parable worth revisiting for some Scottish Nationalists) to the state-sponsored boom in construction and financial services that underpinned the Celtic Tiger’s ruinous second decade.

As McCabe avers, the response of Ireland’s political classes to the banking crisis has proved as disastrous as the policies that created it. On 30 September, 2008, the Irish government elected to guarantee almost all the liabilities of the state’s six financial institutions. The effect of this decision – which led indirectly to the €85 billion IMF/EU bail-out in November 2010 – are still being felt across just about every sector of Irish life today.

The scale of Ireland’s recession is worth reiterating. In 2009, GNP contracted by 11.9 per cent. In the same year, Gross Domestic Product shrank by over 7 per cent. That year, unemployment climbed above 10 per cent for the first time since 1997.

The vital signs from Ireland’s economy are more positive than they were when the European troika rolled into Dublin 18 months ago to agree the bail-out. Indeed, walking around the capital, Ireland doesn’t feel much like a country in the grip of a lost decade. The on-going boom in IT, particularly in the corporate sector, has ensured that an affluent, young middle class remains. Exports have grown steadily in recent years (although a new report issued by Ulster Bank warns exports will weaken in 2012 and GDP will increase by a paltry 0.4 per cent).

But beyond the corporate office blocks and the crowded city-centre bars lies another Ireland, one that profited little from the boom years and now finds it’s bearing the brunt of the Irish age of austerity.

A cursory glance at Irish unemployment figures bears this out. From the halycon days of the Celtic Tiger and full employment, official statistics have joblessness running at over 13 per cent for more than two years. Among young people and recent graduates, the numbers are even worse: for those under 25, unemployment stands at well over 25 per cent.

Headline unemployment rates mask the return of another facet of Irish life supposedly banished by the Celtic Tiger: emigration. The Economic and Social Research Institute in Dublin estimates that more than 1,000 people are leaving Ireland every week. A report released last year by the National Youth Council of Ireland suggested 70 per cent of young unemployed Irish people believed they would emigrate.

Even the signs of economic life in Ireland are not as positive as they appear at first viewing. The bulk of the growth in Irish exports is attributable to the presence of significant numbers of multinationals who use few if any Irish raw materials.

Attracting large foreign firms to Ireland with a generous tax regime and grants has been, and remains, a mainstay of Irish economic policy. However, the value added by these multinationals to Ireland’s indigenous economy is less clear-cut.

According to McCabe, in 2008, multinationals accounted for a whopping 88 per cent of all Ireland’s merchandise export sales. Yet these same companies provided just 7 per cent of total employment. Despite total sales of almost €110bn, they paid about €2.8bn in corporation tax.

Meanwhile, the detritus of Ireland’s laissez-faire housing policy, encouraged by massive tax breaks from central government during the boom years, is littered across the country’s fabled green fields. The problem is particularly extreme in rural areas in the Midlands: the total number of houses in sparsely populated counties Longford, Cavan, Roscommon and Leitrim increased by 50 per cent between 2002 and 2009. Many of these properties now lie vacant on unfinished estates. According to the 2011 census, 294,000 properties in the state – some 15 per cent of total housing stock – are habitable but vacant.

After three and a half years of austerity budgets, which have cost thousands of jobs, there are signs that the Irish population is growing restive. The €100 “household charge”, introduced in last December’s budget as an interim property tax, has proved unpopular, with very low rates of compliance. A more extensive property tax, due to be introduced in the coming months, could prove even more divisive.

All this is bad news for EU mandarins. Ireland is due to vote in a referendum in May or June on the European Fiscal Compact, designed to stabilise the eurozone by enforcing strict budgetary controls on EU nations. The latest opinon polls, published in the Sunday Business Post, suggest 44 per cent would vote in favour, but 29 per cent remain undecided and support for Sinn Fein, who oppose the treaty, has grown substantially.

Recent opinion polls put the republicans on 25 per cent, behind only Taoiseach Enda Kenny’s Fine Gael. Although coalition partners Fine Gael and Labour still enjoy strong backing – and Mr Kenny is personally very popular – support for opponents of austerity is growing.

Leinster House, where the parliament sits, will hope the EU treaty vote will offer an opportunity to renegotiate with the bail-out lenders. The EU-IMF loan was made at a punitive 5.8 per cent, an interest rate that is crippling growth in the economy. Currently, the Irish government is attempting to reschedule about €31bn of promissory notes for its failed banks.

“What we are looking for is a deal to pay them back over a longer period, possibly at a lesser rate of interest,” deputy finance minister Brian Hayes said yesterday. “I would ask people in fairness to be patient with us on this issue.”

Beyond the corridors of power, the new economic reality has produced some creative responses. Comedian Abie Philbin Bowman – who, fittingly, will be appearing at the Glasgow Comedy Festival this Saturday, St Patrick’s Day – is returning to a tried-and-tested financial model: barter.

“I’m planning a tour of Ireland this summer that runs entirely on barter,” Bowman says. “All my shows are free to the public, and afterwards people are asked to make a donation. If they can’t afford to give money, they can offer me a hot meal or somewhere to stay. In the past, one person offered me juggling lessons, another taught me how to fly-fish. It’s a very different experience and a really interesting way of seeing the country.”

The Aviva isn’t down as a date on the tour, yet.

This article originally appeared in the Scotsman, March 15

On the Money

This feature on Irish comics and the recession appeared in Fest magazine ahead of this year’s Fringe.

“Why have estate agents stopped looking out the window in the morning?” begins a gag that has been doing the rounds in Dublin for the last 18 months or so. “Otherwise they’d have nothing to do in the afternoon.”

In Ireland, a wry, gallows humour about the nation’s financial misfortunes permeates. Across the country people exchange increasingly bizarre real-life tales: the estate where one woman lives surrounded by hundreds of empty houses; the train station in a derelict field near Dublin Airport, built to service a massive development that never happened; the former property magnate who now cleans windows on O’Connell Street.

It’s often said that comedy does well in a recession – and the big ‘R’ is firmly in the sights of a host of Irish comics at this year’s Fringe. “I call this my bailout tour. Last year, I was in Greece, this year I was in Portugal. I pity wherever I go next year,” says Keith Farnan, whose fourth Edinburgh outing Money, Money, Money is billed as an exploration of “Ireland’s brief love affair with vast amounts of money and fiscal meltdown.”

Mementos of this failed romance with global capitalism lie dotted around the country’s capital: ubiquitous for sale signs, unfinished apartment blocks, grandiose pieces of public art. Dublin, of course, is not all Rome after the fall. There are still plenty of salubrious city centre hotels, the kind of places where you find piped jazz music, chintz sofas, ladies who lunch… and, er, amiable Irish comics who bear a passing resemblance to Zach Galifianakis.

“I didn’t realise this place was so fancy,” Keith Farnan admits when we meet, on his suggestion, in Dublin’s upmarket Westin Hotel. In front of him, on a glass-topped table, sit a pair of sunglasses, a plate of biscuits and the business section of The Irish Times. Since he started writing Money, Money, Money back in January, the financial pages have become required reading – and have led the hirsute funnyman to some sobering conclusions. “This is the worst recession we’ve ever had. We’ve been poor in the past, but we’ve never been stressed and poor before. It’s not a good combination.”

Farnan himself is no stranger to straitened circumstances. Back in 2006, at the zenith of Ireland’s Celtic Tiger frenzy, the Cork native swapped a comfortable life as a lawyer for the vagaries of full-time standup. “I went from a secure, well-paid job to literally nothing. While my friends were buying second homes, I was investing in loaves of bread and buying shares in ham and cheese. Making a new company – the sandwich.”

With three successful Fringe shows and a star turn on Michael McIntyre’s Comedy Roadshow behind him, Farnan is now well-established on the circuit, but he found writing about Ireland’s economic travails an unexpected challenge. “Last year’s show [Sex Traffic] was about prostitution and rape. After that I thought Money, Money, Money would be easy – but it’s been anything but. It’s been a struggle at times,” he remarks ruefully.

Farnan describes the crash—which began with the global credit crunch in September 2008—as “Ireland’s 9/11”. That might sound a tad melodramatic but the effect on the national psyche of 1,000 people emigrating every week, unemployment at 14 per cent and a whopping $85 billion in bad debts has been catastrophic.

Ireland’s writers, poets and playwrights have struggled to make sense of the desolate, post-collapse landscape. Indeed the task of reflecting the nation back to itself, warts and all, has largely been ceded to comedians, at least temporarily.

“Comedy is the most immediate medium. What’s in the news will often influence your act,” suggests Farnan. “You can also gauge where something sits with people. If you stand up and make a gag that’s too close to the bone, that hits too hard, you’ll get boos. A novelist can’t get that kind of immediate feedback.”

Another Irish comedian with the financial meltdown firmly in his sights, Abie Philbin Bowman, agrees: “In comedy you know if something is shit or self-indulgent pretty much immediately. If you become preachy or start lecturing, people switch off, they stop laughing.”

Philbin Bowman, a garrulous, fresh-faced Dubliner on the “geeky, philosophical end of comedy”, caused a minor sensation at his first Fringe, in 2006, with his sell-out show Jesus: The Guantanamo Years. He returns to Edinburgh this year with Pope Benedict: Bond Villain, an extended riff on why the Protestant countries of northern Europe are bailing out their Catholic neighbours – with Ireland as Exhibit A.

Sitting in the verdant grounds of his alma mater Trinity College—once a seat of Protestant power in Ireland—Philbin Bowman sketches out the rationale behind his latest offering: “In Protestant countries, you get into heaven by reading the Bible, following your conscience and asking questions. In Catholic countries, you get into heaven by feeling guilty, following orders, and repeating the magic words. Once, powerful people bullied us in the name of ‘God’. Today, they bully us in the name of ‘The Economy’.”

Credit default swaps, sub-prime mortgages, asset-backed securities: hardly the argot of comedy gold. Is it difficult to get a laugh out of a financial crash? “Absolutely. It’s horrible – it’s much easier to do jokes about sex,” laughs Philbin Bowman.

“Essentially what happened [in Ireland] is a really boring story. This is a bunch of bald, white, middle-aged bankers making terrible financial decisions. They didn’t even shag their secretaries! So it’s not a natural subject for comedy. But it’s something we urgently need to talk—and joke—about.”

Philbin Bowman has strong words too for the IMF, which led last autumn’s bailout of Ireland’s toxic banking system. “The whole Dominique Strauss-Kahn thing tells you so much about the culture of the IMF,” he says, referring to the allegations that its former director sexually assaulted a chambermaid in his $3,000-a-night hotel suite.

“If you think about it, he could have stayed in a Holiday Inn, paid for a really expensive call-girl and still saved money. This is the guy who was lecturing us on ‘austerity’, ‘fiscal responsibility’ and ‘painful economic choices’.”

The Irish public aren’t the only ones facing up to “austerity” and “painful economic choices” in the wake of the downturn. Like many on the country’s comedy circuit, Colm O’Regan has found it increasingly difficult to sell shows to cash-strapped punters. “Now if people are going to spend money on comedy it’s on the big names that they absolutely trust like Tommy Tiernan and Des Bishop,” says O’Regan, whose second Fringe effort, Dislike: A Facebook Guide to Crisis, has received critical acclaim since debuting in Ireland earlier this year.

Speaking from his Dublin home, now worth half of what he paid for it a few years ago, O’Regan complains that the “arse has fallen out” of the corporate market, once a serious money-spinner for Irish comics. But the recession isn’t all doom and gloom. After years of demanding safe, cheap thrills, audiences are becoming increasingly open to topical, edgy gags.

“For years all most people wanted to hear were jokes about, ‘isn’t it funny how the light switches off in the fridge when you close the door’,” recalls Colm O’Regan. “Now there’s a lot more interest in topical comedy, not just being ranty for the sake of it but proper, measured political satire. That’s making a big comeback.”

Fringe-goers are perfectly placed to profit from Ireland’s boom in recession humour. With so many quality comics in the market, don’t be surprised if there’s a run on sharply observed jokes about macroeconomics, the IMF and idle Irish estate agents, in Edinburgh this August.