John Downing: ‘Brexit looks like it will keep us locked in boom and bust cycle’
Generations of Irish people have learned to live with boom and bust economic cycles. Years of relative plenty were followed, as night follows day, by grief including high unemployment and forced emigration on a large scale.
In fact, if you go back much beyond the late 1960s, it would not be too cynical to say the cycles were often more about going from bust to really busted, as for decades the country was hit by crippling rates of largely enforced emigration.
The 1980s into the 1990s saw politicians across the western world, including Ireland, adopt the mantra: “We need to end that cycle of boom and bust.”
Ireland’s inexorable moves to joining the EU single currency began with voters endorsing the 1992 Maastricht Treaty. They were sealed with promises of “Brussels billions” at a fateful EU leaders’ summit in Edinburgh in December 1992.
Looking back now, the decision was sold by our political leaders as getting huge EU grant aid. But the move was also in part about pursuing a period of more prolonged, if not permanent, economic stability.
The so-called Maastricht criteria, effectively the single currency membership rules, fixed limits on national deficits and long-term debt as a proportion of national wealth. Well before Ireland’s final decision to join the euro, as launched on international money markets on January 1, 1999, we were told the single currency membership rules were a good thing in themselves.
The rules could help “end the cycle of boom and bust”. Since those days of relative innocence, Ireland’s economy has soared to the heights in the mid-2000s, plumbed the depths from 2008 onwards, and then surprised many by bouncing back again to fretful prosperity today.
The experience makes “ending the cycle of boom and bust” far more than a slogan.
When you consider that one in seven Irish people was out of work as recently as February 2012, also a time of high emigration, then you know that we have a yearning never to return to the days of bust.
But the reality is that things were motoring very well until Brexit hit us like a bucket of iced water in the early morning of June 24, 2016. Up to then, we had lived with the assumption that Brexit would be defeated and we would continue in a hopefully moderated and realistic “boomward direction”.
Over three years, we have watched the UK’s politics deteriorate at a distressing rate.
We have looked in vain for signs that a reasonable outcome would cushion Ireland’s economic Brexit fallout, which quickly became clear to most Irish citizens. Now we sit on the edge of another Brexit cliff, 16 days from a potential no-deal exit.
Yesterday, the ESRI spelt out the grim fallout from such an eventuality. The Taoiseach responded by saying it was not good news but we were not headed for bust. Then we learned the no-Brexit plan smacks of saying “sure, it’ll never happen at all”.