Page last updated at 12:07 GMT, Saturday, 19 February 2011

Loss of faith in the Irish fairy tale

By Fergal Keane
BBC News, Dublin

As Ireland prepares to choose a new government, its journey from boom to bust and the years of austerity and pain which lie ahead are likely to be at the forefront of many voters' minds.

People demonstrating outside the Irish Parliament over proposals to accept a bail from the International Monetary Fund (IMF) and EU
Ireland was bailed out by the IMF and EU with 85bn euros (72bn)

It was in the middle of the boom in 2006, and an acquaintance had stopped by my summer cottage on the County Waterford coast.

We were drinking tea in the garden.

"You are mad not to be building here," he told me. "You'd get two places on this land.

"Knock down that thing and build again."

I looked around the modest garden and then at my rickety tin and wood cottage and briefly pictured two gleaming new buildings rising on the spot.

"No thanks," I said, "I am happy with this."

He repeated his view that I was mad.

"You're sitting on a great little goldmine here. You could have one for yourself and flog the other. Pure mad you are."

And in the atmosphere of Ireland that summer I can understand how he would have thought I was mad.

The country was experiencing record economic growth. Land and house prices were soaring. In the space of a decade property had increased in value by as much as 70%.

Age of madness

It was the age of the taxi driver with a portfolio of apartments in Bulgaria, of the super-developers who criss-crossed Ireland in their shiny new helicopters. An age of glad, confident mornings when the ghosts of emigration and unemployment had been sent packing.

Fergal Keane in Dublin
Fergal Keane presents Panorama: How to Blow a Fortune
BBC One, Monday, 21 February

Down on the bay, about five minutes from the cottage, squadrons of jet skis bounced across the waters. These noisy nuisances had become the "must-have" accessory for the newly prosperous whenever they headed for the coast.

The government was telling us the good times would go on and on. In the words of Prime Minister Bertie Ahern, "the boom just got boomier." Looking back now it is easy to conclude that it was an age of madness.

You could open the papers and read of how one property tycoon had taken 44 of his friends on a cruise on the yacht Christina O, formerly owned by Aristotle Onassis, to celebrate his wedding.

This developer had plans to build what he referred to as Knightsbridge in Dublin, a vast apartment and shopping complex in a leafy suburb, next to Ireland's international rugby stadium.

He forked out 54m euro (£45m) an acre for the land and this before he had even secured planning permission.

The entire cost of his wedding celebrations was estimated by one Dublin newspaper at 1.5m euros.

(File photo from 2006) Bertie Ahern
Mr Ahern cast himself as the leader whose vision and energy had dragged Ireland into the 21st Century

A Michelin starred chef was on hand to cook dinner and Cristal champagne flowed all day. The tycoon's new bride, a well-known gossip columnist, was presented with a 300,000 euro diamond necklace.

She was aware of the annoyance this display of largesse might have caused.

"I'm sure I'm getting up people's noses, but I don't care," she said.

Such was the temper of those giddy hours, in the middle of the wedding feast there was a phone call of congratulation from the aforementioned prime minister.

Mr Ahern cast himself as the leader whose vision and energy had dragged Ireland into the 21st Century.

When a few economists warned that the economy was heading for a hard landing, he asked aloud why such "cribbers and moaners" simply did not go and take their own life.

The remarks caused outrage among the families of people who had taken their own lives and Ahern apologised. But he did not change his tune about the economy.

'Epic folly'

How distant, how immeasurably distant those years seem now.

(File photo: 2010) Unsold empty houses in Dublin
Empty houses are a stark reminder of Ireland's boom times

Ireland is a nation in the grip of a moral hangover, wondering how such an age of recklessness had come about and why it had been allowed to last so long.

House prices have collapsed.

There are 600 so-called ghost estates filled with empty houses that nobody will buy.

In a small country like Ireland they are very visible, a monument to the epic folly of an economic boom based on property.

Unemployment in my home city of Cork has doubled in the last decade and with it has come a rise in the rate of suicide.

This week in Dublin a government minister admitted to me: "We got it wrong. We allowed the economy to overheat."

It was a frank statement but such honesty will not save his party from electoral demolition.

The Fianna Fail party - or Soldiers of Destiny in English - was the most powerful political machine in the state for decades.

Nothing is so pervasive now in Ireland as the feeling of betrayal

Its founder, Eamon de Valera, an old revolutionary who fought against the British, once said that when he wanted to know what the people of Ireland felt, he had only to look into his own heart.

The other day, on the doorsteps of Dublin South Central Constituency I heard one voter after another denounce not just Fianna Fail, but an entire political and financial elite in Ireland.

Nothing is so pervasive now in Ireland as the feeling of betrayal. I think we are on the verge of momentous change here.

It will not be reflected in a radical shift in people's politics from right to left, but it could deliver something that has been almost entirely missing in Ireland since the foundation of the state in 1922.

A real and widespread tradition of dissent, a people who will hold their leaders to account on a continuing basis and never, ever again believe that good times last forever.

Find out more about Fergal Keane's investigation into Ireland's crisis on BBC One's Panorama broadcast on Monday, 21 February, 2011 at 2030GMT.

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