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IT’S BLACK THURSDAY, September 30. Ireland’s finance minister, Brian Lenihan, has just announced the final cost of bailing out the country’s banking system: €50 billion. As Euromoney heads out of Dublin airport in a taxi that morning, Lenihan is speaking on Ireland’s national radio, RTE, explaining how the announcement draws a line under the banking crisis and marks the beginning of the restoration of the financial industry to its former glory. The taxi driver is having none of that. Interjecting, he shares an anecdote that he thinks illustrates how the government has lost its way, and the faith of the people. Two weeks earlier, he tells Euromoney, prime minister Brian Cowen had appeared to be drunk during a Saturday morning radio interview, slurring his speech and mistakenly referring to the Croke Park agreement (a government-union pay freeze pact) as the Good Friday Agreement (the Northern Ireland peace accord). Naturally Cowen denies the charge of drunkenness, brushing it off as "ridiculous". Whether true or not, in the broader context of Ireland’s economic fortunes "punch drunk" is perhaps an apter description.
The once envied Celtic Tiger, a model for small aspiring economies the world over, has been in a downward spiral since the end of 2007.