A tale of two cities
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.