Tuesday 21 October 2014

So, how much damage has the New York Times really done to Ireland?

There is such a thing as bad publicity. This week Ireland, much to its discomfort, moved centre stage in the continuing drama of the global economic meltdown.

'Erin go broke' announced Nobel prize winning economist Paul Krugman in the New York Times on Monday. The following day the International Monetary Fund (IMF) told the world that Ireland would pay more to stabilise its banks than any other developed country.

The Government and indeed the chattering classes were appalled. How dare the New York Times, which four years ago published a glowing tribute to Ireland's economic prowess, turn against us this way? And who the hell does the IMF think it is?

Tanaiste Mary Coughlan, in Washington at the time, conveyed the horror of it all, in a revealingly confused quote. "We would like to revert back to the international reputation we had and continue to have," she said of the Krugman piece.

Back at home, the Taoiseach Brian Cowen went on the offensive over the IMF figures. He asserted they were included in an early draft of the report and not used in the final version. This has proved untrue.

"These figures should not be relied on as a measure of likely cost for Ireland or any other country", he stated baldly and somewhat bravely, given the IMF's economic clout.

Has the world turned against us or are they merely stating facts we'd prefer not to hear -- and certainly not from outsiders?

The IMF report and the on-going downgrading of Ireland's credit rating by various agencies have certainly damaged the country's reputation. But the Paul Krugman column seems to have pricked the national ego the most.

Krugman is a respected economist who uses his twice-weekly newspaper column to analyse and interpret economic developments for the general public. He is a professor of Economics and International Affairs at Princeton University and in 2008 won a Nobel Prize for his work on trade theory.

He's no lightweight. In all the reams of newspaper print devoted to the saga of Ireland's fall from prosperity, his piece studiously avoided any references to disappearing pots of gold, potato famines or the comforts of the Irish pub. Nobody has disputed the facts it contains and it is difficult to pick holes in his argument.

"Earlier this month the Irish government simultaneously announced a plan to purchase many of the banks' bad assets -- putting taxpayers even further on the hook -- while raising taxes and cutting spending, to reassure lenders," he writes, truthfully.

"As far as responding to the recession goes, Ireland appears to be really, truly without options, other than to hope for an export-led recovery if and when the rest of the world bounces back." Again, there can be few quibbles with that.

Perhaps, as Coughlan struggled to express, it's the speed with which our once mighty economic reputation has fallen that made Krugman's piece feel like such a killer blow. In June 2005 the same newspaper published "the amazing story" of how Ireland went from "sick man of Europe to rich man in less than a generation".

Michael Dell, founder of the computer company which slashed 2,000 from its work force in Limerick earlier this year, is quoted. "They're competitive, want to succeed, hungry and know how to win," he says of us. He finishes with a "fun fact" that the company, at the time, was Ireland's largest exporter.

But most painful of all was that headline 'Erin go broke', without even a question-mark at the end to soften the impact. It was a rather laboured reference to the Irish- American saying 'Erin go bragh'. Indeed the translation and spelling of the phrase was the main factual quibble with the piece among readers, according to comments left on the website.

It is indeed most damaging that an economist that the Washington Monthly described as "the most important political columnist in America" believes we will lose the economic battle. While Krugman has his detractors, their criticisms mostly relate to his views on US economic policies, rarely on his international analysis.

Krugman's piece has done us no favours. Nor has the IMF claim that it will cost us €24bn to keep Irish banks afloat. When the National Treasury Management Agency went to market this week with €1bn of Irish Government bonds, the reaction was cool, despite the fact that we were the only Eurozone country attempting to raise funds.

Also in this Section

Top Stories

Most Read

Independent Gallery

Your photos

Send us your weather photos promo

Celebrity News