Irish economy foundering

The damage done the U.S. economy by reckless bankers has nothing on the wreckage wrought in Ireland, that nation’s San Francisco-based consul general said Friday.

Gerry Staunton, in Spokane to meet with the Spokane-Limerick Sister City Society, said barely regulated banks in Ireland went on a lending spree that lifted some Dublin property values above those in New York City.

The Irish economy went from the second-poorest in Europe to the second-richest within 15 years, he said.

Money was part of it, but free university tuition also had trained a highly educated work force that was ready when high technology companies like Dell set up manufacturing plants, he said.

But Dell has moved on to cheaper places like Poland, many skilled workers are emigrating, and the Irish went to the polls Friday, almost certainly to oust a government they blame for the collapse, Staunton said.

He said the huge U.S. economy has absorbed the banking shock much more readily than Ireland.

The country has had to borrow almost $93 billion to repair the damage done by the banks, which has meant a much leaner diet for the Celtic Tiger.

The new government’s first order of business will be renegotiating the terms of the loans, he said. Ireland is paying an interest rate of more than 6 percent on money the European Central Bank raised at 3 percent.

“That’s a very expensive loan,” he said.

Ireland is also threatened by a disruption in oil supply; 27 percent of the country’s oil comes from Libya. Staunton said the nation will have to turn to North Sea and Russian sources if the crisis in North Africa does not end soon.

He noted that Ireland is Washington’s sixth-biggest export customer, mostly on aircraft purchases by low-fare carrier Ryanair.

Irish companies have substantial U.S. holdings, he said, including CRH PLC, whose U.S. subsidiary owns Central Pre-Mix and Inland Asphalt.