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After Lehman

Ireland five years after Lehman

Christopher Werth Sep 13, 2013
After Lehman

Ireland five years after Lehman

Christopher Werth Sep 13, 2013

Five years after the collapse of Lehman Brothers and the start of what became a global economic crisis, the final moments of a failed financial institution unfold at a Dublin auction house, where the auctioneer sells off the art collection of Anglo Irish Bank — Ireland’s most notorious lender.

It and other banks in Ireland made scores of bad property loans that cost taxpayers billions of dollars and forced the country into a bailout.

Dublin resident Ronan Farren stopped in to have a look at the paintings, and to reflect on just what’s happened to Ireland over the past few years.

“It’s been a disgrace how the country has been sold, if you like, because of the mistakes of the bankers,” says Farren.

Indeed, the crisis was so deep in Ireland, it’s worked its way into every aspect of Irish life and culture.

At a theater rehearsal in Dublin, the characters in a play called “The King’s Feet” are a couple ground down by financial worries.

“There are debts we haven’t cleared,” says one of the leads.

“Baby, baby, we’re both professionals, alright. We’ll both be working soon. I promise,” her partner replies.

But faced with long-term unemployment, they do what a lot of young Irish people have done lately — they leave Ireland to find work.

Danny McCoy of Ireland’s Chamber of Commerce says the crisis has caused too many people in Ireland to either emigrate or essentially put their lives on hold. But he says that’s partly because the narrative about Ireland has been overly negative.

“The Irish story has been exaggerated out of all proportion,” says McCoy. “People perceive Ireland as some kind of poor, backward European country, which couldn’t be further from the truth.”

He says Ireland is already well into recovery. Sure it’s still in recession, but exports from Irish software and engineering companies are rising by more than 15 percent a year.

The one thing that’s missing, McCoy says, is confidence on the home front — the confidence to spend.

“Households start to spend again and believe in their own future, they’d kick start a very virtuous circle of growth,” says McCoy.

In fact, for a country brought down by a property bubble, his message is one that many thought they wouldn’t hear again for a long time in Ireland.

“Buy a house,” McCoy urges. “Buy a house. There’s plenty of them.”

It’s advice that might not be too far-fetched. Near Dublin’s waterfront, real estate agent Owen Reilly shows me around the city’s technology and financial services district.

In the wake of Ireland’s crash, he says real estate values here dropped by more than half. But demand for housing and office space is on the rise in Dublin. In the past year, Reilly says prices in this neighborhood have jumped 15 percent.

“And I would predict, before this year is out, they’ll increase another 5 percent,” says Reilly.

He notes an average two-bedroom apartment now goes for upwards of $400,000 dollars. And many, like Danny McCoy of Ireland’s Chamber of Commerce, fear another housing bubble is already brewing in the Irish capital.

McCoy says that’s because supply hasn’t kept up — practically no new housing or office space has been built in the past five years.

“We’re going to need to start building — need start building fast,” says McCoy. “There’s always a danger that we’ll go headlong into property again, but you know, have a good time along the way.”

Of course, having “a good time” is what got Ireland into trouble in the first place.

Lehman’s Legacy: A Timeline
Follow the key events before and after the Lehman Brothers collapse, and see how the financial crisis unfolded. Follow the timeline

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