Classic headline!!!!

Ireland falls back into recession despite multibillion-euro austerity drive

By Henry McDonald

June 27 (Guardian) — Ireland is back in recession for the first time since its 2010 bailout, official figures have confirmed.

Irish GDP shrank 0.6% in the first quarter of 2013, but the recession was confirmed when official data revised down the economy’s performance in the final three months of 2012 to a decline of 0.2%. It means that Ireland has endured three successive quarters of contraction, despite the presence in Ireland of multinationals such as Apple, Google, IBM and several big pharmaceutical companies.

The blow comes as Ireland reels from the unfolding Anglo Irish Bank scandal, in which executives at the bailed-out bank were caught on tape joking about their multi-billion euro rescue in 2008 and, at one point, singing “Deutschland über Alles” as they quipped about German deposits shoring up the bank.

The output drop reflects an ongoing depression in consumer demand, amid unemployment of nearly 14%. Personal expenditure declined by 3% between the fourth quarter of 2012 and the first quarter of 2013. The decrease in demand reflects Irish consumers’ fears for their jobs and a reluctance to get into debt following the credit-fuelled spending boom of the Celtic Tiger years. Exports fell by 3.2% in the first quarter, in a stark reversal for an economy that had enjoyed an export-led recovery.

The slip back into recession will be deeply disappointing for the Fine Gael-Labour coalition, which has slashed public spending in a bid to drive down the country’s debt while placating the troika of the International Monetary Fund, European Union and European Central Bank who bailed out the country in 2010. Ireland’s deputy prime minister, Eamon Gilmore, admitted this week that the Anglo Irish revelations could harm attempts to win further debt relief from the European Union.

On a brighter note, the construction industry in the Republic is showing some signs of recovery. The latest figures point to a 2.1% increase in building across the state in a sector which was devastated by the property crash of 2008-09, and which has been a huge factor in lengthening the country’s dole queues.