A tale of two cities

July 13, 2012

By Cathal McNaughton

I’ve been covering the economic crisis in Ireland for over three years, chronicling the changes as the Celtic Tiger becomes a distant memory and the austerity measures grip the country.

But because I’m in Dublin so frequently I have probably become accustomed to the sight of unfinished buildings, “to let” signs and boarded up shops. I no longer properly notice the terrible decline that is gripping the country.

Recently I was on assignment in Oslo, Norway, covering the visit of Myanmar opposition leader Aung San Suu Kyi and it was while I was there that I took time to look around another major European city. The contrast was stark.

In Dublin there is a permanent air of gloom. No matter where you look there are visible signs of the recession with businesses shutting down and building projects abandoned. The Irish newspapers are fixated on the financial crisis and headlines churn out doom and gloom daily. You can’t turn on a radio station without an in-depth debate about the state of the country. In coffee shops it’s all anyone can talk about – the obsession with housing that has dropped hundreds of thousands of euro in value and the impossibility of things ever getting back to normal.

But in Oslo, the economy has been untouched by the recession and it is a booming vibrant city. Just like in Dublin ten years ago there are major building projects underway with luxury apartments being constructed on the waterfront. Property prices are skyrocketing. There is little sign in Oslo that their European neighbors are in turmoil, something that is borne out by the figures.

Unemployment in Norway is 3 percent and the air of positivity in palpable, with people still spending on everything from housing to consumer goods. Oslo itself is booming. It’s one of Europe’s fastest-growing cities and the city council plans to invest more than $4 billion over the next four years.

Norway’s success is based on oil and gas, with the country’s $550 billion sovereign wealth fund owning about one percent of shares traded on the world’s stock markets. The strength of the Norwegian currency, the crown, has dented the competitiveness of the country’s traditional industries, but unlike Ireland, the Norwegian economy is projected to grow by a healthy 3.2 percent this year.

Ireland, by contrast, is in a much worse place. The country suffered one of the deepest recessions in Europe after years of reckless decisions made by the country’s banks and policymakers brought about a financial crisis that eventually led to Dublin seeking an 85 billion euro EU/IMF bailout in November 2010.

Although it has made steady progress in meeting its bailout targets, the government must still push through at least three more years worth of tough austerity measures to reduce the worst budget deficit in Europe, further putting pressure on domestic demand which is not forecast to grow again until 2014. Until then, housing developments are likely to languish unfinished and the “to let” signs will remain outside vacant factories.

6 comments

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Why would you compare Oslo to Dublin? Oslo is a unique economy. It’s a kowledge based, resource rich nation. Even in “the boom”, Ireland had to rely on low taxes and exports but also unsustainable growth in domestic demand based on spiralling international credit.

There’s plenty of Rich and poor cities in the world, in Europe. I like the way you put the piece together, but it would be interesting to see Dublin compared to Iceland’s capital (can’t spell it). Go visit that :-P

Posted by anthonybennis | Report as abusive

The Norwegians must be God’s chosen people.

Posted by nossnevs | Report as abusive

Norway = 13th in global petro production. Ireland? 107th. Yes Nossnevs, they are chosen.

Posted by otiscsi | Report as abusive

Made a dozen business trips to Dublin between 2003 and 2006 and everywhere I went I saw these big signs declaring various projects funded 85% by EU development funds. It’s easy being the “Celtic Tiger” when the fresh meat is delivered to your doorstep. In that case, one doesn’t need to be careful about funding and expenses since it’s someone else’s money being spent.

As the last round of east european countries joined the EU and all those development projects matured in Ireland, Ireland changed from the poor sister getting all kinds of money to being in the upper half paying for others. Seems that “Celtic Tiger” wasn’t so prepared to live out on the savannah with the rest of the big boys.

Posted by iq160 | Report as abusive

Dublin is Catholic. Oslo is Protestant. Same story the world over. Catholics breed poverty and sadness. Protestants breed wealth, happiness, and prosperity.

Posted by mulholland | Report as abusive

The fact that you would equate money with God shows how misguided you are my friend.His is not a kingdom of this world, read the papers , avarice breeds misery.

Posted by EJS712 | Report as abusive