"Rip-off Ireland" gets cheaper

DUBLIN — Long classified as one of the more expensive countries in the world, Ireland is steadily becoming a cheaper place to live and visit.

As recently as 2008, “rip-off Ireland” — as the country has often been dubbed by Irish people themselves — was the second most expensive country in the European Union, according to the Irish Central Statistics Office (CSO) in its just published annual report. Shoppers could expect to pay a quarter more on average than their European counterparts. The cost of living was higher only in Denmark and exceeded even that of Finland, which has long had a reputation as the most expensive place in Europe. This year, things have changed. With disposable income drying up in the face of a deep recession, price wars have broken out among grocery chains, furniture stores, car dealers, hotels and restaurants. In July, the trend to cheaper living in Ireland was confirmed by the Mercer 2009 Cost of Living city index. It graded Dublin the 25th-most expensive of 143 world cities, nine places below the previous year (and almost on a par with Los Angeles, which was ranked 23rd).

But the summer vacationer from the United States will still find Ireland expensive, especially as the dollar has weakened in recent weeks. A Big Mac — that international indicator of cost of living — costs $5.42 in Dublin at current exchange rates, compared to $3.57 in the U.S. But travelers will also find that hotel prices have been slashed by as much as two-thirds, and once over-priced restaurants are offering “early-bird specials” right through the evening.

For people living here, it is more important that long-overpriced items in supermarkets are costing less. The big grocery retailer Tesco boasted last month to have made 12,500 price cuts in its Irish stores. Services have become cheaper and easier to get. It was difficult during the construction craze to find plumbers, electricians or repair workers to do a domestic job at short notice. Today they are delivering leaflets door-to-door imploring householders to give them work, at reduced rates.

Since there is less money circulating, however, a new and unpleasant business culture has emerged that is crippling individuals and small firms. The collapse of the construction bubble has left many sub-contracted workers seeking back payments in court from near-bankrupt building contractors.

Greg Renwick, a self-employed electrician in south Dublin, tells me that one construction company he works for is five months behind in payments due to him, and he fears that if he walks away from it he will never get anything. My daughter Emer O'Clery, director of a television production company in central Dublin, says she has been waiting since October 2008 for payment from a major communications provider — and another small firm that owes her money complains that it too is waiting for payment from a bigger company. The Dublin Chamber of Commerce reported on Aug. 17 that the average time to settle business bills is 90 days, three times longer than last year. The CSO’s report, called “Measuring Ireland’s Progress 2008” (“Measuring Ireland’s Decline” might be a more apt title), details how, from being one of the richest countries in the E.U., Ireland has become one of the most financially-strapped, with the largest deficit of any of the 27 member states. Ireland is facing negative growth of 8 percent in 2009, according to the International Monetary Fund in April.

The CSO report tells us that unemployment remained low in 2008 at just over 5 percent (statistically almost full employment) but that too has changed drastically. The number of people claiming unemployment benefits has soared in mid-August to over 12 percent of the workforce and is predicted to rise to 17 percent before the year is out. Half a million people are now out of work in a country of just four and a half million.

And thus, net migration, the curse of Irish history, has returned, with a government think tank predicting this week that 40,000 Irish people will this year pack their bags and seek their fortunes elsewhere.