Ireland isn't working: Celtic Tiger becomes sick man of Europe

Just a couple of years ago, Irish ministers and officials used to look forward to meetings such as tonight's gathering of European Union finance ministers in Brussels.

Such occasions gave them a chance to bask in the glory of the amazing turnaround which had transformed Ireland into one of the world's most striking economic success stories, making it the envy of Europe.

When Ireland styled itself the Celtic Tiger, it did so with huge pride. But now these meetings have a character of crisis: gone are the congratulations, to be replaced by a general sense of desperation as Ireland struggles to stay afloat.

Other countries will join in that effort, seeking not just to rescue the Irish but to prevent their economic woes from proving contagious for the rest of the EU. In other words, Ireland, once the country that was showing the way, has degenerated into the country which might drag others down.

The most pressing question is whether Dublin should seek help from the EU or the International Monetary Fund. But whatever happens on this point, everyone reckons its troubles are here to stay, at least for years.

The Irish Republic has braced itself for four consecutive swingeing budgets aimed at bringing borrowing down to a 3 per cent target by 2014. That would wipe out many of the achievements of the previous years, a back-to-the-past scenario. But there is an awful suspicion that even these moves may not be enough; the fear is that the whole thing could go into freefall. Although the authorities are taking desperate measures, there is as yet no widespread Irish feeling that stability is about to be achieved anytime soon.

Instead, the mood is closer to dismay as crisis follows crisis, with government estimates of the scale of the problem getting worse and worse over the months, to be balanced with precious little in heartening news. The old depressing consequence of Irish recession, that of emigration to the United States, Australia and elsewhere, has yet to return on any significant scale. But emigration fairs around the country are attracting large numbers investigating the possibilities of moving abroad.

At some stage there could come a tipping point when significant groups of people will conclude, regretfully, that the economy will take many years to recover and will buy one-way tickets to places with brighter prospects.

Certainly there is already little confidence that things can be turned round by the present government, which records historic lows in opinion polls. The Prime Minister, Brian Cowen, gets particularly poor ratings, his party's best performer being the Finance Minister Brian Lenihan. But his efforts have not prevented a steep rise in unemployment which has put more than 460,000 on the dole, chasing a very small number of jobs. Only Spain and Slovakia have a higher proportion of jobless.

The change in fortunes has been astounding. Exactly six years ago one survey concluded that Ireland was the best place in the world to live, with the highest quality of life of more than 100 countries. The Independent reported then that Ireland "has been transformed from a glum financial basket-case to a vibrant rapidly changing country. The state has left most of the old poverty behind."

Unfortunately for the Irish, the phrase "glum financial basket-case" is an uncomfortably accurate description of the country's present plight, and with its massive debts no one can figure out how its one-time prosperity can be rebuilt.

In the good years, public-sector earnings and welfare benefits soared to new heights, with the unemployed faring better than in many other countries. Now the general view is that such spending is unsustainable and that painful cuts must be made.

Much of the boom was built on the construction industry, which was thriving until the property bubble burst. But the collapse of the construction business has left many stranded in "ghost estates", surrounded by half-built homes which in all probability will never be finished since the builders have gone bust.

The economy's future in general looks no more secure. The only certainty is that the years of plenty are over, and that it will be a long time before affluence returns to Ireland.