Beyond the PIIGS

Property prices are surging across Ireland, but especially in fashionable districts of Dublin, such as the redeveloped Grand Canal Dock at the mouth of Dublin Bay. Once desolate, it is now a place of innovative architecture and luxury apartments, waterside bars and restaurants. Multicolored messages of appreciation adorn the walls of U2's dockside studio. The bustling quarter is overlooked by the office blocks housing the European headquarters of Facebook and Google.

The air of prosperity in "Silicon Dock" and the continual inflow of new investment seem to confirm that "we are no longer one of the PIIGS," as the "Irish Independent" proclaimed in a recent editorial. Ireland may no longer belong in the same bracket as struggling Greece.

The troika of European Central Bank, European Commission and International Monetary Fund that oversaw the country's reforms, is now just a bad memory. Unemployment has dropped below 11 percent from a peak of 15; emigration remains an acute social problem in the west and south - 40,000 people left the country in the year to April 2014 - but the numbers leaving are falling fast as the economy picks up.

But, as with Greece, Ireland is carrying a debt that is heavy and possibly unsustainable. The country annually spends twice as much on serving its obligations as it does on infrastructure. And with fresh and vivid memories of daily life in a sinking economy, the Irish well understand the difficulties Greeks are in. Both countries have experienced mass unemployment and emigration of the young. Large numbers of people in both countries depend on the charity of others. Austerity - and the new taxes and levies it entails - has brought hundreds of thousands onto the streets of Dublin and Athens in protest.

Since the recession began Greece has served as a comfort blanket for Ireland, a reminder that, bad as things might be, they could be much worse.

Relief deserved

David Hall understands all too well the Greeks' yearning for relief. He talks of the terror on the faces of thousands of families coming to him for help to negotiate a dysfunctional banking landscape, Hall established the not-for-profit Irish Mortgage Holders Organization during the recession. For no charge, he advises people on how to become bankrupt, and gain protection from their creditors. Like many he has a measure of sympathy for the new Greek government's efforts to make a fresh start.

There is broad agreement across the Irish media that Greece deserves some relief, but the government has been strongly opposed to debt forgiveness. That opposition notably hardened last week, when Finance Minister Michael Noonan told a parliamentary committee that he would not support any write-down of debt, nor any position that sought to remove Greece from the euro area. The new Greek government appeared to be making 'impossible' proposals to tackle the looming funding gap, he said.

Noonan has a point, says Allan Gregory in his antiquarian bookshop off Georgian Waterloo Road in Dublin city center. Bookselling was a precarious business during the recession and remains difficult despite the economic upturn: the slide in the value of the euro continually adds to the cost of importing rare books from the UK and the US, just as collectors are thinking of buying again. To offer Greece a special deal when times are still tough for the likes of him would be wrong, he says.

"There would be an outcry by the Irish people if, for some reason the European government decided to relieve Greece of their responsibilities," Gregory says. Any concession "could be another reason for the ordinary Irish person to get off his seat and join the crowds on O'Connell Street," he adds, referring to recent mass demonstrations against water charges on Dublin's main thoroughfare.

'Responsibility starts at home'

Seamas Coffey, a lecturer in economics at University College Cork, has long been one of the few voices to argue that Ireland - and Greece - must not blame supranational organizations for mistakes made in Dublin, or Athens. Responsibility begins at home, and irresponsible lending by Irish banks and poor financial regulation are at the heart of the country's difficulties, he stresses.

The sound bites emanating from Greece cause Irish people to overlook the fact that that country's real problem is not so much debt, Coffey says, adding that the amount Greece pays to service the debt is low. He argues that the problem is "an economic system that does not work." Longer maturities, or some write-down of debt would be welcome, but the problems lie elsewhere, he says.

What Greece needs, says Coffey, is not so much debt relief, as an end to the uncertainty, and a sense of stability such as that now catching on in Ireland.