Goodbye, Ireland

Tout ça, parce qu’ils ont voulu supporter (bail-out) les erreurs de leurs banques.

Je sens que le peuple ne se laissera pas faire, l’histoire est loin d’être finis.

Extrait de: Goodbye, Ireland, Patricia Treble, Macleans.caFebruary 2, 2011

With the economy in a tailspin, the Irish are leaving the Emerald Isle at the rate of 1,000 a week

With their economy in a tailspin and bad financial news piling up, the Irish people are voting with their feet—they’re leaving the Emerald Isle at the rate of 1,000 a week. Last Thursday, the Economic and Social Research Institute (ESRI) published a grim forecast: net outward migration will reach 100,000 in the two years ending in April 2012.

Packing up and leaving in dire times is nothing new for Ireland. In the 1800s, millions fled the island’s famines and disease for the chance of a better life in countries such as Canada, the United States and Australia. Even recently, there have been waves of emigration. The last time the emigration numbers were as high as they are now was in 1989, when 44,000 fled the economically depressed nation. Soon after, Ireland cut taxes, attracted massive foreign investment and transformed itself into a Celtic Tiger. Property prices soared along with personal wealth.

Unfortunately, that super-quick growth was unsustainable, and with the worldwide economic downturn, Ireland’s financial and property sectors imploded, dragging down the entire economy. After promising to bail out the banks, the government saw its deficit reach a dizzying 31.5 per cent of GDP in 2010. Ireland needed a $110-billion bailout from the European Union and the International Monetary Fund in November, and it outlined $20 billion of draconian budget cuts over the next four years.

While the economy will grow this year by an anemic 1.5 per cent, the export-led expansion won’t generate enough jobs. For that, the economy needs consumer consumption to improve. And the ESRI is gloomily forecasting the Irish will keep their wallets firmly shut: “Ongoing uncertainty with respect to job stability, wages and taxation are likely to act against any rebound in consumption spending.” 

Still, as families say goodbye to their younger generation as they strike out for other lands, there is one ironic sliver of good news in the emigration statistics. If all those workers don’t leave, then Ireland’s unemployment level, expected to average 13.5 per cent in 2011, would be even higher.

Extrait de: Moody's downgrades more Irish banks' to junk rating, BBC News, 11 February 2011

Credit ratings agency Moody's has cut its rating of four Irish banks to junk status citing concerns over new funding which was due at the end of February.

Ireland reclaimThe government says it will not make extra funds available before the general election on 25 February.

Opposition parties, who may form the next government, have expressed opposition to further bank aid.

Bank of Ireland, Allied Irish Banks, EBS Building Society and Irish Life & Permanent were all downgraded.

Anglo Irish Bank and Irish Nationwide, which have already been given junk status, were cut further.

Moody's says it is keeping the banks' credit ratings under review and has warned of further possible downgrades.

Burden sharing

Opposition party Fine Gael, currently leading the opinion polls, has suggested imposing 'haircuts' on senior bank debt-holders, forcing them to share the cost of any restructuring of bank debt following the election.

"The banks are hugely reliant on central bank funding, and that's not going to go away anytime soon. By potentially burden-sharing with senior debt holders, you are obviously potentially putting back the ability of banks to fund again in the market," Ross Abercromby, Moody's Irish banking analyst, told the Reuters news agency.

Moody's Investors Service is one of the "big three" credit ratings agencies, along with Standard & Poors and Fitch Ratings.