Lean times for the Irish Republic

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By Mark Simpson BBC News, Dublin

Taoiseach Brian Cowen is a former finance minister like Gordon Brown

Ireland may have lost its Celtic Tiger economy but it has not lost its sense of humour.

The fear that the economy in Ireland could crash as spectacularly as it did in Iceland has given rise to a credit crunch joke.

What is the difference between Ireland and Iceland? One letter and six months.

Like most humour, the joke combines a grain of truth with a handful of exaggeration.

Prof Brian Lucey, an economist at Trinity College Dublin, says: "We're not as bad as Iceland because we're saved by the still pretty low interest rates of the euro.

"We got here through what was pretty much a perfect storm. First of all, there's a world economic crisis going on which we are affected by. In addition to that, we had our own artificially generated, credit-based boom which ultimately has led to an enormous and very deep property crash."

Shared crisis

How times change. The Irish economy used to be the envy of Europe but the Celtic Tiger has lost its roar and workers are losing their jobs.

An unemployment rate of more than 10% is predicted by some economists, and it could rise even further.

High-flying Dublin businesswoman Joan Mulvihill has already been made redundant from her job in corporate finance. Her career went suddenly from boom to bust.

She says: "One of the things you lose is your own sense of identity. I was Joan Mulvihill, senior manager. Saying my name and not having an anchor to attach it to, I realised how dependent we had become on our job titles and our business cards… Who was I without that?"

The economy may be depressed but she is not. Like many people, she is trying to fight her way out of the recession by finding a different career. Innovation rather than recrimination.

The Irish Trade Minister, Mary Coughlan, is also trying to look on the bright side.

She said: "I would have felt more depressed if we were the only ones [in recession]… but of course we're not. It's a global economic recession that we have.

"There are many decisions that have impacted on us that were well outside of our remit."

Retail losses

Unlike in France, the Irish government has succeeded so far in avoiding ugly street protests over its handling of the economy. Indeed, the Irish Taoiseach (prime minister), Brian Cowen, is currently trying to work with the unions rather than against them.

Negotiations are under way to try to find a way of saving 2bn euros ($2.62bn, £1.84bn) in public spending. In such a small country, it is a jaw-dropping figure.

Although it has not turned nasty on the streets yet, there is genuine alarm about how much money needs to be saved.

As in the UK, the prime minister is a former finance minister, so his reputation is inextricably linked to the state of the economy. Mr Cowen had to revert to the politics of last resort when he nationalised one of the country's largest banks, the Anglo-Irish.

Retail sales are at a 24-year low and it is estimated that 1,000 jobs a week are being lost.

What is not helping is the fact that thousands of people from the Irish Republic are doing their weekly grocery shopping at large supermarkets in Northern Ireland. The fall of the pound against the euro means they can save up to 30% on their bill.

That means money is being lost to the Republic's economy at a time when it needs it most.

When Mr Cowen visited Northern Ireland last week, the North's First Minister, Peter Robinson, joked that he might want to do his shopping in Tesco on the way home.

Mr Cowen could not help but raise a faint smile.