The Irish fairy tale 2.0: The "Celtic Tiger" has become "Celtic Phoenix" in the new false recovery narratives
Irish
people lose their houses with frantic rate, but Brussels and Schäuble
praise another 'success story' where there is only a disaster!
It's seen as
a shining light of European austerity, but despite Ireland's
celebrated economic turnaround, the country still has a dirty secret:
home repossessions. The problem could be set to get a whole lot worse
too.
The emotions
are still raw when Andrew Bradshaw talks about what happened last
year when he was evicted from his family home.
"My
girlfriend and I were leaving the house and, as I was driving out, a
convoy of eight vehicles -- vans, jeeps and police cars -– came
past in the other direction," he recalls. "I knew they were
coming for me, so I turned back."
Bradshaw's
hunch was right. The convoy had been given the job of forcibly
evicting the 40-year-old from his home in the small town of
Mullingar, one hour west of Dublin. After he was unable to make
mortgage payments on his home, Bradshaw had been occupying the house
since 2012, only leaving the premises occasionally.
"In the
end, two bailiffs came either side of me and dragged me out. While I
was still standing there, they were putting up barricades on the
house."
Trying to
move on
Since his
eviction, Bradshaw has moved in with his girlfriend. If he hadn't,
he'd probably be without a roof over his head. He says now, he "tries
to put a positive spin on things" but that it is still "very
difficult."
It's a
classic example of a story that is playing out across Ireland on a
daily basis. Whereas previously repossession cases used to be dealt
with in Dublin's courts, these days local court lists across the
Republic are now full of repossession and eviction trials. There are
reports of up to 40-50 repossession cases a day in some towns.
It's a
problem that has found its way into the mainstream in Ireland, but is
often forgotten overseas. In 2011, Trish Burnett helped form the
Anti-Eviction Taskforce, a nationwide organization that tries to stop
repossessions taking place. She says that, despite all the good news
about Ireland's economy, she still hears of many people losing her
homes.
"You
might think that things are getting better, but when you speak to
people, you realise that things are not better," says Burnett,
who herself was forced to give up her home in 2010.
"People
are still losing their homes, they are just putting on a brave face."
Outrage
amongst Ireland's anti-eviction campaigners reached new levels
recently after it came to light that Irish bank "Permanent TSB"
incorrectly calculated interest on mortgages during the height of the
global financial crisis. The mistake lead to around 1300 consumers
paying too much on their mortgages and some families losing their
homes as a result.
"If TSB
is just one bank that has done that, then what have the other banks
done?" Burnett asks, before admitting that it's important that
people still try to work with banks to solve any issues.
The
so-called "Celtic Phoenix"
Meanwhile in
Brussels, Ireland is being lauded as one of the success stories of
Europe's austerity approach. In October of last year, German finance
minister Wolfgang Schäuble praised the country publically, saying he
was "envious" of its success.
The
country's recovery has been labeled by the media as the "Celtic
Phoenix," a tongue-in-cheek reference to Ireland's initial
"Celtic Tiger" boom period.
But the
turnaround has been unable to solve the long-term problems created by
Ireland's property bubble, which saw consumers take out huge
mortgages on over-priced properties for years. In these cases, once
something goes wrong (for Andrew Bradshaw it was an accident that
stopped him working) the mortgages often become impossible to service
very quickly.
"Ireland
has stellar numbers at the moment," Dublin-based economist
Constantin Gurdgiev acknowledges. "But three-quarters of the
country's growth is thanks to the multinationals and tax
optimization."
"On the
ground, I would score the recovery at around 4 out of ten," he
says.
A
negative trend
According to
Gurdgiev, 27,000 repossessions have taken place in Ireland since the
country first had economic difficulties in 2008, and the repossession
rate has increased again in the first quarter of 2015. Gurdgiev, who
also serves as a Director on the Board of the Irish Mortgage Holders
Organisation, says the problem is set to get worse before it gets
better.
He argues
that, although banks have restructured mortgages for certain
consumers, they have mainly dealt with the easiest cases meaning some
mortgages are now heavily in arrears. And, since the Irish housing
market is now finally recovering, Gurdgiev says some banks are
deliberately delaying the repossession of homes so that they can get
a better sale price for the property.
"They
are sitting pretty, waiting for the house prices to rise so that they
can repossess into the higher property market," he explains. "In
the meantime, the family is still paying unsustainable mortgages
which are not getting them anywhere."
For some,
like Andrew Bradshaw, the best relief is when it is all finally over.
"I'm
kind of tired of fighting," says the former panel beater, who
tried to save his house for five years. "That could change next
month, or next year. But my feeling at the moment is that I should
just leave it behind and try to get on with my life."
Source:
Very informative. Thanks.
ReplyDeleteThank you Garrett! Welcome to the blog.
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