Brian Lenihan blames euro and Eastern cheap labour for recession

free to prosper

Lenihan blames euro and cheap labour as cause of overheating and Ireland’ recession

Low euro interest rates and cheap labour from Eastern Europe after 2004 were the main reasons for the overheating of the Irish economy which led to the recession, the Minister of Finance, Brian Lenihan has said.

[see news article Irish Mail on Sunday 28/6/09 page 2]
Asked about the causes of the recession during ‘The Last Word with Matt Cooper’ radio show on Thursday 25/6], Minister Lenihan put it down to,

‘cheap credit from the European Central Bank, the availability of cheap labour after 2004 was a factor as well.'

He also added. ‘the public appetite for lending, and public appetite for increased purchase of property were part of it.’
Former Green MEP for Dublin, Patricia McKenna said the ‘membership of the euro currency has led to a credit bubble and shows that the European Central Bank has huge say over our economy. The ECB,’ she said, ‘ is more geared to the interest of big states like France and Germany, and we shall find going forward, as they recover quicker, that it does not act in the interest of Ireland.’

The People’s Movement spokesperson also described the ‘economic scare mongering’ of some on the Yes side as ‘odious.’ The people of Spain, she said, had voted Yes in a referendum on Lisbon, but they were currently in a very bad situation with an unemployment rate almost double that of Ireland. ‘The economic policies pursued by the EU and enshrined in the Lisbon Treaty are’, she said, ‘ the same policies which have failed across Europe.’

Ireland was once held up, she said, as a shining example to other states of what good the EU could do, but while they took the credit while it suited, they now wash their hands as things turn bad.’

Minister Lenihan was taking part in a radio interview provoked by the latest IMF report on the Irish economy which proposed from 2005 to 2007, ‘easy credit fostered a property bubble,’ and Ireland’s ‘international competitiveness was compromised as wages climbed rapidly.’

While the IMF report suggested that access to ECB financing has been an important source of liquidity for the banking sector, it also pointed out that since Ireland’s Euro currency membership meant ‘the possibility of adjusting through the depreciation of its own exchange rate is not available, further wage reductions will be required to restore competitiveness and growth prospects.’



Ireland voted to join the Euro currency under the Treaty of Maastricht in 1992

Since May 2004 almost half a million people from Eastern Europe have come to work in Ireland, more than was suggested by Government ministers during the Treaty of Nice debate in 2002. This increased numbers of workers has also been fingered by economists as a factor in the housing construction boom.

Minister Brian Lenihan admitted, ‘We did overheat the economy, I have always accepted that and I made that clear in my last budget speech.’



These fools told us to vote for Maastricht - we were screwed by the Euro
They then told us to vote for Nice - we now have half million economic migrants

These same fools not tell us to vote for Lisbon -

Is there anyone willing to commit economic suicide and follow their lead?

O'Morris

free to prosper wrote:

Low euro interest rates and cheap labour from Eastern Europe after 2004 were the main reasons for the overheating of the Irish economy which led to the recession, the Minister of Finance, Brian Lenihan has said.

The opening of our borders to the eastern Europeans didn't just lead to an increase in the supply of cheap labour, it also led to an increased demand for housing. According to this article, at the height of the boom in 2005, more than a quarter of new home sales were to non-nationals.

HOK has reported that, so far this year, almost 30 percent of new homes sales were made to non-nationals, up from under 5 percent just two years ago.

"From levels of very low percentages in the last few years, this group of buyers has exploded," says O'Driscoll. A wide variety of nationalities are buying.

The vast majority are European and not just from new accession states; many buyers are also French, German, Italian and Spanish.

However, the eastern Europeans are among the bigger group of buyers. Chinese purchasers have always been a "fairly significant" group, according to O'Driscoll. Now there are also a lot of Indian buyers entering the new homes market as well as a "very large number" of Filipino and some South African nationals.

The jump from 5% to 30% in the space of just two years is hugely significant. That means that the demand for housing among the immigrant population was much higher than it was among the Irish population.

PopeBuckfastXVI

I suppose it's easier than looking to his own party policies over the last 8 years.

gerardo1982

I'm voting no to Lisbon - enough is enough.

spongeman

Well Brian your party was the one that let them all in.

Vote No.

asdasd

I suppose it's easier than looking to his own party policies over the last 8 years.

His party decided those policies. His analysis is correct, though, and although he is saying nothing about immigrants ( just the level of immigration), and nothing at all about race, there will be cries of racism from the same old rent a mob.

topper75

It's a no from me I'm afraid Brian.

Glenbhoy

O'Morris wrote: »

The opening of our borders to the eastern Europeans didn't just lead to an increase in the supply of cheap labour, it also led to an increased demand for housing. According to this article, at the height of the boom in 2005, more than a quarter of new home sales were to non-nationals.



The jump from 5% to 30% in the space of just two years is hugely significant. That means that the demand for housing among the immigrant population was much higher than it was among the Irish population.

I wouldn't be too quick to take an article quoting one estate agent as being indicative of the market overall, and that's before even querying whether or not the estate agent had a possible vested interest in talking up potential demand.

solice

Now I am not one to be standing up for FF, in fact, I feel a little dirty at the moment!

But the man has a point. Apart from the government mismanagement, lack of regulation and bad policies the ECB should, in my view, be held responsible for a certain amount of our woes at the moment.

The ECB kept interest rates very low in order to stimulate the German and French economies. But this did not help to stabilise our economy at all. If we had high interest rates at the time people would have been less inclined to buy a second home or get 100%+ morgtages. This would have slowed down the building sector to a realistic level and made the bubble burst much softer. Our hunger for wealth was fuelled by low interest rates. Im not an economist so I may be very wrong so if you want to pick holes then pick away

As I said, im not one to support FF or that Lenihan dynasty, but he has a point...

ednwireland

the ecb kept rates loew and what did FF do ? pour tax breaks into building houses in places that didnt need them, they can blame europe all they they like but they didnt help themselves (and i couldnt understand FF policies from 1997 )

solice

ednwireland wrote: »

the ecb kept rates loew and what did FF do ? pour tax breaks into building houses in places that didnt need them, they can blame europe all they they like but they didnt help themselves (and i couldnt understand FF policies from 1997 )

Absolutely! FF got it very very wrong!

But the ECB didnt help us.

Maybe a two tier Europe is actually a good thing. France, Germany, Italy, Poland and the UK at one level and the rest of us at another level. We are committed to the ECB, we have no choice or say in how it works or its decisions. The ECB will always work for the greater good and that will always be the core of France and Germany (the powerhouses of the EU). We will always have to live with the consequences of its decisions, sometimes this will benefit us, sometimes it wont. And it hasnt benefited us in the last 5 years!

How can one central bank for 11 countries always work for the benefit of all 11 countries?

View

free to prosper wrote: »

Lenihan blames euro and cheap labour as cause of overheating and Ireland’ recession

Low euro interest rates and cheap labour from Eastern Europe after 2004 were the main reasons for the overheating of the Irish economy which led to the recession, the Minister of Finance, Brian Lenihan has said.

[see news article Irish Mail on Sunday 28/6/09 page 2]
Asked about the causes of the recession during ‘The Last Word with Matt Cooper’ radio show on Thursday 25/6], Minister Lenihan put it down to,

‘cheap credit from the European Central Bank, the availability of cheap labour after 2004 was a factor as well.'

He also added. ‘the public appetite for lending, and public appetite for increased purchase of property were part of it.’

To point out the obvious, in the quotation from Mr. Lenihan, he says they were "... a factor as well" (i.e. one factor). You claim he said they were the "... the main reasons...".

How on earth do you make you he said they were "... the main factor ..." when he clearly isn't quoted as saying that?

free to prosper wrote: »

Minister Lenihan was taking part in a radio interview provoked by the latest IMF report on the Irish economy which proposed from 2005 to 2007, ‘easy credit fostered a property bubble,’ and Ireland’s ‘international competitiveness was compromised as wages climbed rapidly.’

Very true, but so also did Government policies. After all, when you give large property based tax breaks you should hardly be surprised if this creates a large demand for everyone to buy property, should you? Likewise, who contributed to the wages rises? Why the Government - who as one to the largest employers in the State - gave out pay awards above the high rate of inflation and hired lots of extra staff, thus reducing the available supply of labour.

I should also point out that he is contradicting himself. In a free market, wages climb rapidly if there is a shortage of labour, yet according to Mr. Lenihan apparently "The availability of cheap labour" resulted in ".... wages (that) climbed rapidly".

Funnily enough, the mantra I remember from Government Minister's when people complained about rising prices and the various tax breaks was always along the lines of "We can't interfere in the market", an idea that didn't last very long when it came to the banks...

stevedublin

gerardo1982 wrote: »

I'm voting no to Lisbon - enough is enough.

why?
enough what?

asdasd

Our hunger for wealth was fuelled by low interest rates. Im not an economist so I may be very wrong so if you want to pick holes then pick away

No, that is absolutely correct. In many senses people react like pavlovian dogs to such stimuli. Interest rates should never be below inflation. When that happens the cost of a loan is lower than the cost of not getting the loan. If you take out a loan for X% (compound) when inflation is Y%(compound); and Y > X then you pay back less in real terms than the principal of the loan.

Also saving makes no sense. Funny enough, then, that we ended up with a society that didnt save and was massively indebted.

View

solice wrote: »

Absolutely! FF got it very very wrong!

But the ECB didnt help us.

Maybe a two tier Europe is actually a good thing. France, Germany, Italy, Poland and the UK at one level and the rest of us at another level. We are committed to the ECB, we have no choice or say in how it works or its decisions. The ECB will always work for the greater good and that will always be the core of France and Germany (the powerhouses of the EU). We will always have to live with the consequences of its decisions, sometimes this will benefit us, sometimes it wont. And it hasnt benefited us in the last 5 years!

How can one central bank for 11 countries always work for the benefit of all 11 countries?

A good post but there are a number of points to be made.

First, as you say the ECB is there to work for the greater good of the Eurozone as a whole. That, however, doesn't absolve the individual member states of the responsibility of pursuing prudent economic policies. In fact, if anything, membership of the Eurozone requires the member states to be more stringent about what they do since they can't rely on a tame local central bank being there to give them an easy way out of their mistakes.

Now, that shouldn't be a surprise to anyone, yet the economic policies we pursued essentially seem to have ignored that we are members of the Eurozone. There was little, if any, effort made to alter our policies to keep our policies in step with the rest of the Eurozone - there was no effort keep inflation in line with the rest of the member states; no effort to compare how well our Government delivered its services wrt to its peers elsewhere in the Eurozone, as for "value for money" in service delivery...

free to prosper

Euro interest rates totally inappropriate for Ireland have done huge damage.

The Irish economy is going down the tubes. People are loosing their jobs, watching their wages being cut and now ask why this is so. There are a number of complex reasons why this has happened: we are caught up in a global recession, and the government policy of relying heavily on stamp duty for taxation income did great harm to the shape of our economy.

But one of the major causes of our economic collapse is the euro currency which killed us in two ways.

One, Inappropriate euro interest rates caused a boom and bust, and

two, harmful foreign exchange rates are today strangling our exports.

For this reason I believe we should oppose more centralised EU control of our national government/economy and loss of our veto in important policy areas which the Treaty of Lisbon would allow.

free to prosper

Many Irish economists at at the time of the Maastricht Treaty debate were totally opposed to us taking up the euro currency.

The first consequence of adopting the Euro was handing over control of our interest rates to the European Central Bank, which takes much greater cognisance of the larger states such as France and Germany.

Between 2003-2006 the ECB kept interest rates very low to raise the Germany economy. As a result, Ireland sloshed around in a sea of cheap credit which led to an unsustainable building boom beyond compare. But just as we needed higher interest rates to calm the economy down to a sustainable level, the ECB cut rates to help the continental countries.

The interest rates appropriate for Germany were totally inappropriate for Ireland.... and Italy, for Greece and Spain. Berlusconi was right when he said that “Prodi’s euro has screwed us all”.

Cheap money led to an asset bubble and we became over-reliant on construction and selling houses.

Bust now follows boom in Ireland. But even last Autumn when the Irish economy was heading downward, the ECB RAISED interest rates to help cool the Germany and French economies. This was madness but we have now learnt the hard way that, in monetary terms, one size does not fit all.

The euro truly is the poison in your pocket.

What do you think was the largest factor in the overheating of the economy - cheap euro credit or mass immigration?

oscarBravo

free to prosper wrote: »

What do you think was the largest factor in the overheating of the economy - cheap euro credit or mass immigration?

Shoddy government.

the_dark_side

oscarBravo wrote: »

Shoddy government.

This is the main reason

free to prosper

oscarBravo wrote: »

Shoddy government.

Which told us to vote for Maastricht - and get hammered by the Euro

Which told us to vote for Nice - and get hammered by Mass immigration

and which now tells us to vote for Lisbon - and hand over more power to the EU.

You need to have little sense to take a eurofanatics advice.

P. Breathnach

free to prosper wrote: »

... Cheap money led to an asset bubble and we became over-reliant on construction and selling houses...

Cheap money made that possible; it did not make it inevitable. A different taxation and regulatory package could have lessened, perhaps even overcome, the effect of cheap money.

oscarBravo

free to prosper wrote: »

Which told us to vote for Maastricht - and get hammered by the Euro

I haven't been hammered by the Euro.

Which told us to vote for Nice - and get hammered by Mass immigration

I haven't been hammered by mass immigration.

and which now tells us to vote for Lisbon - and hand over more power to the EU.

I won't be hammered by tired soundbytes, thanks.

You need to have little sense to take a eurofanatics advice.

When I vote for Lisbon, it won't be because the government "told" me to.

IIMII

Massive zoning was the gunpowder, construction-related immigration was the match. The economy then went boom, and we wonder why?

topper75

free to prosper wrote: »

...

One, Inappropriate euro interest rates caused a boom and bust, and

two, harmful foreign exchange rates are today strangling our exports.

...

I would have agreed with you a year ago. The notes and coins are aesthetically horrible.

However, from a macroeconomic point of view, we really need the damn thing. It is what stopped us going down with Iceland and Latvia. Imagine the speculation against the punt! Rem the early 90s? would have been a picnic by comparison to 2008/09 if we were outside the euro.

I still hate the concept of political union but economic union saved our proverbial.

The export/import problem will always be there. If we had competitive exports to send to the UK, the huge volume of goods and services we buy from them would be more expensive. That is the last thing that strugglers need on their trip to the supermarker. Withdrawing from the euro doesn't fix that eternal dilemma.

I think it was a boom factor yes, but the blame for the bust lies largely elsewhere.

PopeBuckfastXVI

IIMII wrote: »

Massive zoning was the gunpowder, construction-related immigration was the match. The economy then went boom, and we wonder why?

Why do you think immigration was the match? Do you not think that prices had risen as far as new banking products would let them, without moving to 45 year 120% mortgages? Do you not think that as soon as capital appreciation stopped the specuvestors had no more reason to stay in the game, and started clambering over each other to pile out, leaving the Canny McSavvies panicked and sitting on assets worth far less than they owed on them. In turn leading on to hoarding and a contraction in the overall economy, when taken with the mass construction layoffs due to the lack of interest in property, attributable to the mentioned lack of capital appreciation.

In fact I would say the immigration we experienced in the last few years is the safety valve, given that, thankfully, these people can leave Ireland relatively easily, with little or no emotional or social cost, which allows our economy to contract without imploding.

Also you can't on the one hand give out that we engaged in a massive asset bubble and massive inflationary period which reduced competitiveness, and in the same breath turn round and give out that immigration has kept wage demands less than they might have been otherwise.

You can't have it both ways.

djpbarry

free to prosper wrote: »

One, Inappropriate euro interest rates caused a boom and bust …

Low interest rates didn’t cause a boom-bust; our obsession with property did.

free to prosper wrote: »

Cheap money led to an asset bubble and we became over-reliant on construction and selling houses.

It could have lead to any number of other things, like an innovative, technology-driven “knowledge economy”, but, property obsession and all that…

free to prosper wrote: »

Which told us to vote for Nice - and get hammered by Mass immigration

Define “hammered”.

free to prosper

Thanks Toppper75

I am totally opposed to the EU becoming a political union - as Lisbon facilitates.

Iceland went down the tubes because its banks had 10 times its gdp out on loan - not because it was outside the Euro.

Two of the most economically successful countries in Europe are outside both the EU and the eurozone - Norway and Switzerland.

You will notice that because the UK pound was devalued so much by the markets that its exports have become cheap and started to rise again already.

No-one is talking of leaving the euro are present - what I am doing is pointing out the economic madness of the euro giving us totally inapppropriate interest rates.

We are not saved by the euro - we have been made a basketcase by the euro interest rates.

free to prosper

djpbarry wrote: »

Define “hammered”.

Irish Ferry workers have been hammered!

Since May 2004 , half a million immigrants from new EU accession states have come to work in Ireland.

According to the CSO figures 90 per cent of new jobs in 2007 went to non-Irish nationals.

The latest Welfare figures show 29,000 PPS number have been given to non-Irish nationals in Ireland since the start of 2009.

Yet in the last year, over 100,000 people in Leinster alone have lost their jobs.

That's what I call hammered.

solice

free to prosper wrote: »

Two of the most economically successful countries in Europe are outside both the EU and the eurozone - Norway and Switzerland.

Would just like to point out that the Norwegian (sp?) economy was for the last 100 years based mainly of fishing and agriculture. Its main reason for not entering the EU was that it didnt want to give up its waters to spanish fishermen.

The Swiss economy is shrouded in mystery and is being seriosuly examined by the US and EU for use by companies and private investors for tax evasion. It will be interesting to see what Switzerland will be like in 10 years time if Obamas policies are enforced.

I wouldnt hold either economy up and say that they are better off because they are not in the EU.

Also, I would like to mention that the Datamonitor Country Analaysis for Ireland states that Irelands rejection of the Lisbon treaty poses serious economic problems for the country. Datamonitor is an independent body with no vested interest in Ireland or in the EU.

But I do agree that the ECB has hindered our ability to control our own economy. But the Govt didnt help itself, it made the situation worse with tax breaks which further fuelled the drive for property started with low interest rates (or vice versa)

free to prosper

Thanks Solice,

Spain voted yes to the Lisbon Treaty and its unemployment rate has increased to 18 per cent.

Not a great advertisement for voting yes.

Better I think to vote No to Lisbon and keep as much democratic control of our countries future are possible.

solice

free to prosper wrote: »

Thanks Solice,

Spain voted yes to the Lisbon Treaty and its unemployment rate has increased to 18 per cent.

Not a great advertisement for voting yes.

Better I think to vote No to Lisbon and keep as much democratic control of our countries future are possible.

I assume that you sourced the 18% figure and that it is accurate (?) but you cannot say that their high unemployment is due to voting yes to Lisbon. Sensational to say the least.

Spains biggest industry is tourism. You would imagine that in a global recession that people would not be going on as many foreign holidays. That is the reason for Spains high unemployment, over reliance on one industry.

Scofflaw

free to prosper wrote: »

Thanks Solice,

Spain voted yes to the Lisbon Treaty and its unemployment rate has increased to 18 per cent.

Not a great advertisement for voting yes.

Better I think to vote No to Lisbon and keep as much democratic control of our countries future are possible.

Spain hasn't voted on Lisbon at all - it voted on the EU Constitution. In 2005. And the EUC did not then come into force. Spain's 2009 unemployment rate is as likely to relate to that vote as to the phase of the moon.

Where on earth did you pick up that incredibly inaccurate little gem? Or is it your own work? If it is, I would strenuously recommend avoiding any career that involves the word 'analysis'.

highly amused,
Scofflaw

professore

free to prosper wrote: »

What do you think was the largest factor in the overheating of the economy - cheap euro credit or mass immigration?

Continuing in the mood of thinly-disguised racism:

Stupid paddy punters paying way over the odds for housing with money lent to them by stupid paddy banks and encouraged by enormous tax breaks from the stupid paddy government voted for overwhelmingly by the paddy punters (the non-UK immigrants can't vote in national elections). The immigrants only came because there was so much work. How many of the 1/2 million are still here?

PopeBuckfastXVI

free to prosper wrote: »

Thanks Solice,

Spain voted yes to the Lisbon Treaty and its unemployment rate has increased to 18 per cent.

Not a great advertisement for voting yes.

Better I think to vote No to Lisbon and keep as much democratic control of our countries future are possible.

Scofflaws correction on what Spain actually voted on notwithstanding. Here's a thought, seeing as we're pointing out entirely unrelated phenomena and drawing inferences, with no logical validity...

What has happened to Ireland's unemployment rate since it voted No to Lisbon?

IIMII

PopeBuckfastXVI wrote: »

Why do you think immigration was the match?

Put simply, it was bad enough that so much planning permission was given out for residential development and that there was so much cheap credit at that particular point. But even with zoning and cheap credit, the tidal wave of (transient) construction related immigration has left us high and dry on the beach. If hadn't been able to spew out so many new homes over the past 5 years, house-building would have been more moderate, and construction work that might have kept x amount of Irish construction workers busy for ten years, would not have been burnt up in a fraction of that time by multiply our construction workforce so recklessly for that period.

No, many of those migrants are off again, and we have feck all work for our own construction workers for God knows how many more years. We didn't become multicultural from 2004 to '09 - we imported consumers and construction workers. No the construction is gone, so too are those consumers, leaving many without a pot to piss in.

From the point of view of economic stability, what we did from 2004 was suicidal

djpbarry

free to prosper wrote: »

Irish Ferry workers have been hammered!

Unless I am very much mistaken, the dispute you are referring to was resolved via the Labour Relations Commission?

free to prosper wrote: »

Since May 2004 , half a million immigrants from new EU accession states have come to work in Ireland.

Prove it.

free to prosper wrote: »

According to the CSO figures 90 per cent of new jobs in 2007 went to non-Irish nationals.

Hmm. I think you’re referring to a quote attributable to one Conor “Google is not my friend” Lenihan?

free to prosper wrote: »

The latest Welfare figures show 29,000 PPS number have been given to non-Irish nationals in Ireland since the start of 2009.

I ain’t goin’ there again.

free to prosper wrote: »

That's what I call hammered.

I see. So when you say we’ve been “hammered” by immigrants, what you mean is, a lot of non-Irish people now live in Ireland and you’re attempting to argue (by throwing together a few random “facts” and figures) that they are to blame for our current economic malaise?

daveyboy_1ie

The world is in a reccesion of course but very few are in such a bad styate as us, overspending with FF over the last decade nearly, unemployment rising and lots of mortgage holders in negative equity that will cripple them for years to come and this is all a result of FF's policies over the last two terms when they encouraged a nation that had 25% of people directly or indirectly employed in the construction industry (feeding greedy speculators).

So the best thing we can do is put someone else in power, they cant make a b*lls of it as much as FF, who have had their chance and blew it BIG time. Hopefully things get better soon but we will recover slower than the rest I am afraid.

As for the Lisbon treaty, how is it a democratic process when a government has another referendum when the result they wanted origianlly did not happen???

djpbarry

free to prosper wrote: »

Spain voted yes to the Lisbon Treaty and its unemployment rate has increased to 18 per cent.

Not a great advertisement for voting yes.

Ireland voted ‘No’ to Lisbon and now it’s raining.

Hmm….

P. Breathnach

free to prosper wrote: »

Spain voted yes to the Lisbon Treaty and its unemployment rate has increased to 18 per cent.

Not a great advertisement for voting yes.

What was the connection between Spain voting yes and its current unemployment rate? The wrath of God?

Better I think to vote No to Lisbon and keep as much democratic control of our countries future are possible.

Most of our economic development over recent decades has been greatly helped by our EEC/EC/EU membership. Our recent crash has been exacerbated by the way we used our democratic control of our country's future.

free to prosper

Apologies Scofflaw.
Spanish people who knew very little about EU constitution - voted to pass EU constitution, not the treaty of Lisbon.

They voted Yes in 2005.

Their current unemployment rate is currently 18 per cent.

(Remember, its a yes side argument - vote Yes and everything will be just grand) Not proven by reality we see is it?

The Common Market - a free and open market is good for the IRish economy.

But Lisbon turns the EU towards being a political union and will not help our economy one iota.

solice

free to prosper wrote: »

Apologies Scofflaw.
Spanish people who knew very little about EU constitution - voted to pass EU constitution, not the treaty of Lisbon.

They voted Yes in 2005.

There current unemployment rate is currently 18 per cent.

(remember its a yes side argument - vote Yes and everything will be just grand) Not proven by reality we see is it?

I am always wary of people who suddenly turn up and start racking up their post counter on such troll like posts - sensational and ill-informed

Spains unemployment has nothing to do with the EU constitution or Lisbon, neither are enforced! The main reason for unemployment being so high is due to their over reliance on the tourism sector which is obviously going to be affected by a global recession!

djpbarry

IIMII wrote: »

We didn't become multicultural from 2004 to '09 - we imported consumers and construction workers. No the construction is gone, so too are those consumers, leaving many without a pot to piss in.

That’s just a touch simplistic, don’t you think? Every immigrant worked in construction and has now moved on?

PopeBuckfastXVI

IIMII wrote: »

Put simply, it was bad enough that so much planning permission was given out for residential development and that there was so much cheap credit at that particular point. But even with zoning and cheap credit, the tidal wave of (transient) construction related immigration has left us high and dry on the beach. If hadn't been able to spew out so many new homes over the past 5 years, house-building would have been more moderate, and construction work that might have kept x amount of Irish construction workers busy for ten years, would not have been burnt up in a fraction of that time by multiply our construction workforce so recklessly for that period.

No, many of those migrants are off again, and we have feck all work for our own construction workers for God knows how many more years. We didn't become multicultural from 2004 to '09 - we imported consumers and construction workers. No the construction is gone, so too are those consumers, leaving many without a pot to piss in.

From the point of view of economic stability, what we did from 2004 was suicidal

All of that would be true without immigration, we would have just been paying brickies X euro an hour instead of Y. (X > Y)

Capital appreciation and greed caused the boom/bust.

The demand was serviced by immigration, but immigration was a symptom, not a cause.

asdasd

I see. So when you say we’ve been “hammered” by immigrants, what you mean is, a lot of non-Irish people now live in Ireland and you’re attempting to argue (by throwing together a few random “facts” and figures) that they are to blame for our current economic malaise?

The facts were not random. An increase in the demand for housing is not going to reduce the cost of housing. The apologists for the housing market during the boom were always pointing to the future demographics in Ireland, mainly an extrapolation of immigration trends, to justify the continued increase in prices.

Immigration is not really a universal social good, like the curates egg it is good in parts.

djpbarry

asdasd wrote: »

Immigration is not really a universal social good, like the curates egg it is good in parts.

Maybe, but that's not really the point. Blaming the property bubble on immigration is more than a touch fallacious; jobs were created, immigrants filled them. We could have invested our cheap credit elsewhere and created jobs in other sectors, but we chose not to.

PopeBuckfastXVI

asdasd wrote: »

The facts were not random. An increase in the demand for housing is not going to reduce the cost of housing. The apologists for the housing market during the boom were always pointing to the future demographics in Ireland, mainly an extrapolation of immigration trends, to justify the continued increase in prices.

They sure did, they also used everything from a well appointed south facing window, to urban regeneration of 'up and coming' area's and the Luas being extended sometime around 20-never.

Still, no one's blaming windows, deprived area's or the Luas for the bust.

Immigration serviced a demand, and thank goodness, helped to keep wage inflation slightly down, ensuring that we will regain competitiveness faster than if we were in a position where we had more jobs than people to fill them.

It's also the best safety valve we have, just like the Brits went home from the German building sites in the 70's the <insert random nationality here> workers will head off home now there's no more work in Ireland.

There's not much can be done about unemployed construction workers though, we simply have more than we're ever likely to need again.

Perhaps they can migrate to another EU country for a while, unless we manage to stamp out internal EU migration, like some around these parts have been calling for...

free to prosper

djpbarry wrote: »

Unless I am very much mistaken, the dispute you are referring to was resolved via the Labour Relations Commission?
Prove it.
Hmm. I think you’re referring to a quote attributable to one Conor “Google is not my friend” Lenihan?
I ain’t goin’ there again.
I see. So when you say we’ve been “hammered” by immigrants, what you mean is, a lot of non-Irish people now live in Ireland and you’re attempting to argue (by throwing together a few random “facts” and figures) that they are to blame for our current economic malaise?

Eh no, all the Irish workers lost their jobs.
Is this what you call - dispute solved?

The Number of PPS numbers issued to New Assession States is public knowledge - it's been all over the papers.

I'm not blaming NAS immigrants for causing overheating.

Like Lenihan, I put cause of overheating on cheap credit from Euro Central bank and cheap labour labour from Eastern Europe post 2004.

Who are to blame?
Those gormless europhiles who told us to
vote for Maastricht - the euro
Vote for Nice - accession and mass immigration.

The whole problem was compounded by silly tax and regulation system, but initial macro-economic cause was cheap credit and cheap labour.

asdasd

Immigration serviced a demand, and thank goodness, helped to keep wage inflation slightly down, ensuring that we will regain competitiveness faster than if we were in a position where we had more jobs than people to fill them.

Well to be fair it only kept wage inflation down in the part of the economy which competed with immigrants.

And you can see why that would piss them off.

the civil service, and protected parts of the private sector were sitting pretty. Pro-immigration sentiment is highest in the richest suburbs.

Scofflaw

free to prosper wrote: »

Apologies Scofflaw.
Spanish people who knew very little about EU constitution - voted to pass EU constitution, not the treaty of Lisbon.

They voted Yes in 2005.

There current unemployment rate is currently 18 per cent.

(remember its a yes side argument - vote Yes and everything will be just grand) Not proven by reality we see is it?

Er, no. Let's go over this one step at a time:

1. Spain voted Yes to the EU Constitution - in 2005
2. The EU Constitution did not come into force - at all
3. Four years later they have an unemployment rate of 18%

Now, leaving aside the four year gap, there's another, even more massive hole in the argument - the EU Constitution didn't enter into force.

Since the Constitution never entered into force, the Spanish vote had no practical outcome whatsoever. You're claiming that something with no practical outcome actually had a negative effect, and not just that, but the effect was mysteriously delayed by four years, during which the unemployment rate in Spain continued falling:

Year|Unemployment
2000 |16
2001 |14
2002 |11.3
2003 |11.3
2004 |11.3
2005 |10.4
2006 |9.2
2007 |8.1
2008 |7.6

It's such a bizarre claim. It barely even merits the word 'claim', really - 'delusion' or 'fantasy' might be more appropriate.

I hope you don't take offence at any of this - did you get it from somewhere else, and never really examine it?

cordially,
Scofflaw

IIMII

PopeBuckfastXVI wrote: »

All of that would be true without immigration, we would have just been paying brickies X euro an hour instead of Y. (X > Y)

Capital appreciation and greed caused the boom/bust.

The demand was serviced by immigration, but immigration was a symptom, not a cause.

I am not blaming immigrants or immigration (they just did their jobs). I am blaming the lunacy of a policy of opening the doors of a country of 5m to hundreds of thousands on migrants to fuel a housing bubble. Regarding our Brickies, they might have been expensive but the couldn't have a built over a decade's housing stock in just a couple of years. The problem is we have burnt up demand for years to come, and to make matters worse recent migrants are heading off too leaving empty properties.

Scofflaw

asdasd wrote: »

Well to be fair it only kept wage inflation down in the part of the economy which competed with immigrants.

And you can see why that would piss them off.

What's hilarious, though, is that the same people are probably now calling for deflation as a way out of the trouble without taking a pay cut. Given our reliance on imports even in domestic spending, deflation would be the same as a wage cut.

cordially,
Scofflaw