West of Ireland economy hit hard by economic crisis

Marian Harkin, independent MEP for the North-West, said the gap between the regions has been widening

The economic crisis has taken a heavy toll on the west of Ireland, with the value of its economic activity plunging from the EU average to being close to debt-ridden Greece.

The difference between the wealthy east and south, with Dublin at its centre, is also vast.

Regional GDP per capita in the Southern and Eastern region in Ireland was €39,900 in 2011, compared with €23,700 in the Border, Midlands and Western region. In purchasing power terms, the south and east saw GDP per capita at 145% of the EU28 average, while the Border, Midlands and Western region had 86% of the average

The latest figures from Eurostat show that Ireland lost a greater share of its wealth than any other country, with the exception of Greece, between 2007 before the onset of the crisis and 2011, which are the most recent figures.

And despite the crisis hitting the euro as well as countries, four of the countries holding the euro grew during that time. They were Germany, Austria and France, all rated triple A by the rating agencies, and Portugal that has subsequently had to have a bailout.

The Netherlands and Finland, also triple A, lost GDP as did Spain, whose banks needed a bailout. Non-euro countries that also showed growth included Sweden, Denmark, Poland, Lithuania, Latvia and Bulgaria, while Britain was among the biggest losers.

Ireland was second in terms of economic activity after Luxembourg in 2007 before the banking scandal, having a GDP 45% greater than the EU average.

In 2011, as the worst effects of the crisis took hold, the country was still rated 29% above the EU average, but the counties in the west and north had slipped from the EU average to 84%, close to Greece’s 80% and just less than Malta. The south and east was at 45% above the EU average.

Marian Harkin, independent MEP for the North-West, said the gap between the regions has been widening and reflects the fact that the policy of having a balanced regional development has been abandoned.

“I don’t blame the Government for putting Ireland Inc first in the crisis — you had to deal with the whole country — but it is time now to refocus and this time to ensure that every policy takes into account the need to develop the whole country.

“A 60 point difference between the two is totally unacceptable,” she said.

She added that the BMW region would never have the same GDP as the rest of the country, but the figures for GNP — which more closely reflect the incomes of real people and Irish-owned SMEs rather than multi-nationals — were also diverging, she added.

Austria and the Netherlands have now caught up with Ireland on the EU GDP scale. The figures were calculated in terms of purchasing power parity.


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