Editor’s Note: Contributing writer Emily Cesta has spent much of her twenties living abroad. In this post, Emily offers reflections on the world economy through the lens of her experiences in Ireland as the “Celtic Tiger”, (Ireland’s economy) contracted dramatically in 2008. We will also be following this post with an upcoming series on managing your finances while living abroad.
Dublin is looking pretty dreary these days. Although most of the recent European monetary news is centered on the financial fall of Greece, almost every country in the European Union is feeling the pinch. According to Eurostat, the Standardized Unemployment Rate in Ireland for the First Quarter of 2010 was an unprecedented 13.2%, exceeded only by Latvia, Spain, and Slovakia. In contrast, the U.S. Bureau of Labor Statistics puts the U.S. unemployment rate thus far for 2010 at 9.7%.
When I first moved to Dublin in January 2008, I was amazed at the sophistication and high standard of living. My apartment was brand new. We were one of the first to move into the beautifully-landscaped and meticulously-planned complex. There were new buildings popping up on every corner. The bustle of Grafton Street was like a dream, flanked on either side by high end department stores like Brown Thomas and Weirs Jewelers and intermingled with historic sites and the writing haunts of people like Joyce and Yeats.
Ireland’s 12.5% corporate tax rate and strong political relationship with the U.S. brought companies like Dell and Microsoft running to plant their flags on Irish soil. (There are rumors that Bill Gates and Michael Dell had a Lightsaber battle over location.)
Not only is it cheaper than running a business in the UK, but it is the only other English-speaking country standing between the U.S. and the rest of Western Europe. It’s a great stop on the way to and from European mainland destinations from the U.S. Eastern Seaboard, and a convenient home base for companies with international needs.
It didn’t take long, however, before the building simply stopped. Unfinished apartments, abandoned buildings with only three outer walls and a serious loss of jobs were all anyone spoke of. The money simply dried up. Companies were moving. Dell moved its manufacturing plant from Limerick, Ireland to Poland. Waterford Wedgwood had a financial collapse. There was a banking crisis. Property values plummeted and no one could afford their mortgage. People were getting laid off and there was simply no more work.
As it turns out, I had arrived for the last breath of a mythical creature—the Celtic Tiger—a term describing Ireland’s boom economy between 1995 and 2007.
But in 2008, the spirit of the Celtic Tiger was in the wind, soaring its way down the streets of Dublin, through the arched entrance of Trinity College, along the piers of Dún Laoghaire, and out to the Irish Sea.
Here is the bottom line: the Celtic Tiger is Ireland’s Bigfoot. Years from now I’ll be sitting in my local pub, listening to some old man tell the story of how he saw the Celtic Tiger in all his glory, his coat shiny with health from living off the fat of the land. And I will want to believe him. I really will. But deep down I’ll know this man is lying.
The Celtic Tiger never really existed at all.
Check back later this week for the first article in our series on managing your finances abroad.