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:

http://www.dw.com/en/the-dark-side-of-irelands-economic-recovery/a-18655920