Page last updated at 17:12 GMT, Tuesday, 7 April 2009 18:12 UK

Irish downturn hits man and beast

By Emily Buchanan
BBC News, Dublin

Horse 'Squire' and Jimmy Cahill of the Dublin Society for the Prevention of Cruelty to Animals
Squire is safe now but some racehorses have not survived the downturn

The Irish government has announced tough austerity measures as it tries to get a grip on a spiralling budget deficit. As Emily Buchanan reports, the downturn has reached every corner of the economy.

The sudden collapse of the Irish Republic's economy has hit hard - both for its people and some of its animals. At a sanctuary outside Dublin, staff have seen a surge in abandoned horses.

The lucky ones are like Squire, a pure-bred draught horse, who was found half-starved on scrubland. He may find a new home.

It is another story for the racehorses; bought in the good times by wealthy businessmen as a passport to social status, they are now being dumped. But being too wild to keep, they have to be shot.

Jimmy Cahill of the Dublin Society for the Prevention of Cruelty to Animals says he has seen four times as many rejected racehorses this year as last, and he estimates altogether there are 20,000 horses in the country that nobody wants.

"When people don't have spare cash, the horse is the first thing to suffer, they'll either abandon it or put it in someone else's field," Mr Cahill says.

It is a far cry from the heady days when all along Dublin's docklands were signs of growth.

'Crony capitalism'

Rows of cranes and empty office buildings are now all that is left of a building boom which fuelled the much admired "Celtic Tiger" economy.

The collapse in credit and confidence has left Ireland in a perilous state says Dr Brian Lucey, of Trinity College's School of Business.

"We're not as bad as Iceland simply because we are in the eurozone," he says, "but within the eurozone we are more fragile than any other country."

Dublin university students
This is the worst possible year to graduate
Dublin University student

That is partly because of the Irish Republic's small size and its brand of "crony capitalism", which prevented anyone calling an end to the party, according to Dr Lucey.

"One of the major problems was a toxic brew of a construction industry too close to government, and regulators captured at the gate. There's no doubt the poster child for failure is Anglo Irish Bank," he said.

The Irish government nationalised Anglo Irish in January amid fears it would collapse.

Dr Lucey says: "It was the front runner, but all six of Ireland's major financial institutions rescued by the government were engaged in toxic [or very risky] lending."

Public anger is being directed at the government, which presided over the uncontrolled boom. It is deeply unpopular and the opposition is putting ministers under fire for not seeing the storm coming.

"There have been numerous warnings not only here at home but from international bodies," says Richard Bruton, finance spokesman of the opposition Fine Gael party.

"The government refused to heed those warnings. Our party has always been highlighting how the government built huge spending commitments on the back of property revenues which were unsustainable," he says.

'No intention of defaulting'

In Dublin's famous O'Connell Street the long line of taxis is another visible sign of the shrinking economy.

The drivers complain there are too many taxis - more than in New York, they say - and they have to wait more than an hour for a fare.

Richard Bruton
Richard Bruton says ministers failed to see the economic storm coming

It is a problem caused by lack of regulation, a rising tide of jobless seeking to earn a living as a cabbie, and fewer customers. It is a situation which looks set to get worse.

Bailing out the banks, along with plummeting tax revenues, now means the government faces a ballooning budget deficit, which reached 3.7bn euros (£3.4bn; $4.9bn) in the first quarter of this year.

As a member of the eurozone it is under pressure from the European Central Bank to bring the deficit under control, forcing it to announce tough public spending in its emergency budget on Tuesday.

The government is worried as already Standard & Poor's has downgraded Ireland's credit rating. There have been concerns that Ireland might even default on its debt.

But this is an idea which Deputy Prime Minister Mary Coughlan is keen to stamp on.

"We, Irish elected politicians have no intention of defaulting on any loans we take out in order to deal with the current difficulties that we have and it's on that basis that the Irish people will not lose their international reputation," she says.

But more public spending cuts will not help to boost the country's empty job market. On Dublin's university campuses students face their prospects with increasing alarm.

One arts student echoes many who say they want to go abroad: "A lot of my friends are thinking of going to New Zealand and Australia as the economic climate is better. This is the worst possible year to graduate," he says.

But for the first time in Irish history the emigration safety valve has been closed by the global recession. Many of those who have left are already coming back. This is uncharted territory for the Irish Republic. No-one can predict if frustrations will explode into social unrest.

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