By Anna Kawar, staff editor The Celtic Tiger has fallen and can’t get up. Unfortunately this one can’t be chalked up to overdoing it on the Guinness – the Irish government has formally applied for a financial rescue package upwards of $100 billion. This comes after months of insisting that it can handle its own finances, going so far as to prepare a four-year plan to reduce its deficit to 3% of GDP, down from 32%.
Making matters worse, the minority Green Party, along with two other large opposition parties (Labor and Fine Gael), has called for a general election to be held in January. The ruling Fianna Fail party, under threats from the Green Party that they would resign from government, has reluctantly conceded considering a recent poll showing that only 17% of voters would back them in an election. This means that in the new year, we’ll most likely see a new government under pressure to carry through on the new budget and plans for the Irish economy.
In a country that enjoyed a growth in GDP of 350% in the decade up to 2007 and where housing costs were seven times those of similar U.S. markets, the current unemployment rate is at 14%, and the government has increased the VAT by 2% up to 24% along with a 10% cut in wages for public sector workers. Despite these and other major cuts to social programs and wages, few strikes have occurred in Ireland. Strikes aren’t effective because of Ireland’s dependence on the global economy, which is ironically also the reason for its initial economic boom.
I have been visiting my mother in Dublin every Christmas since the peak of Ireland’s economic prosperity in 2006, and have witnessed the growing weight of the economy’s downfall on the people’s shoulders. We’ll see how the Celtic Tiger fares this holiday season; hopefully he’ll rouse for some Christmas ham.