It is now becoming difficult to discount the weight of evidence suggesting that the Irish economy is in strong rebound mode. Economic growth of 7% in Q3 and 7% for the year to date has propelled tax returns greatly in excess of targets. This performance is also well ahead of the targets on which the current budget was predicated.

All seems rosy enough, yet there remains a nagging doubt that the current performance may be taking place on thin ice. That would be natural, not to say prudent, given past disasters from seeming positions of impregnability. Ironically, all of this good economic news came at the same as the RTE Investigations programme that uncovered the appalling behavior of certain local councilors.

In the same week as much of the country lies under water – something that might reasonably be attributed to, at best incompetent, and at worst nefarious planning activities – it is relatively easy to be visited with a chilling sense of déjà vu. One wonders sometimes what has been learned from the ruinous years post-2007.

Against a background of one of the greatest property crashes in history, there is something about the extraordinary recovery in prices, particularly within the M50, that simply does not ring true. Central Bank measures have stabilized the price increases but, regardless, we now have the first generation that will probably never be able to buy their own home without substantial help from their parents.

And how galling is it that after the biggest property glut of all time, runaway rent levels are eating into employees’ take-home pay, destroying competitiveness in the process with the inevitable pressure on salaries. The potential for the housing market to become a casino once again is real.

It almost seems as if some phantom puppet-master is acting malignly to rig the market. As anybody who has been through the pantomime of attempting to buy a house through private sale will testify, there is something profoundly unsatisfactory about the process in terms of complete lack of transparency. They don’t do things this way in other countries.

The neutering of the reform of the legal profession likewise sends a bad signal to anyone who yearns for the dismantling of vested interests and cartellist behavior that has made business such an uphill struggle in the past.

Ironically, the biggest threat to the recovery in Ireland probably comes from without rather than within.

The global economy, on which Ireland as a relatively tiny open economy still depends, is balanced precariously.

Western governments have effectively “solved” the debt crisis by issuing more debt and in fact carry more debt than at the time of the banking crisis. Fissures in the Euro structure remain unresolved. Nothing has changed except that people have grown more accustomed to the position.

The alternatives remaining open to “solve” the sovereign debt crisis – whether to pay it off or inflate the economy – are equally unpalatable. Both routes are damaging for growth and investment.

Interest rates in general and on government bonds in particular are an anomaly with a “new normal” of 2 percent replacing the “old normal” of 5 percent – although signs are that in the United States at least some moves in the direction of the old normal are under way. Regardless of headline bond rates, the appetite of heavily indebted governments to invest in infrastructure is seriously diminished by their precarious positions.

But there are long-term positives. Lower oil prices are welcome but for those countries such as the UK which have vast swathes of their economy predicated on oil the transition will be painful in the short term.

All that said, at local level the recovery is certainly welcome for those sitting on (diminished) negative equity and the effective removal of the banks’ veto for Personal Insolvency Arrangements (PIAs) will undoubtedly remove a fairly significant obstacle that threatened to render the Personal Insolvency regime stillborn. That, and the proposed change in Bankruptcy law to reduce the term of Bankruptcy from three years to one will have a knock-on effect of making it far easier for debtors to negotiate with their banks.

We at StubbsGazette were opposed to reducing the discharge period to one year and submitted to the Government our reservations on such a change. We felt, and still feel, that some debtors might sleepwalk into bankruptcy without understanding the grave consequences for their future ability to get credit. But notwithstanding this, reality is a prerequisite for resolution, for debtors and creditors alike, and at last the structures are in place to deliver.

Here’s hoping that the positive signals deliver in 2016. Happy Christmas!
SEARCH OUR DATABASE PLACE YOUR DEBT WITH US SEND A DEMAND LETTER