Breakingviews - Irish eyes keep smiling despite a strict lockdown

A man jogs near Dublin Port, as the spread of the coronavirus disease (COVID-19) continues, Dublin, Ireland, March 29, 2020.

KILLALOE, Ireland (Reuters Breakingviews) - The tower of toilet paper grazed the roof of Killaloe’s SuperValu, in Ireland’s County Clare. To a weary traveller just arrived from London, where essentials like hand sanitiser and baby formula were nowhere to be found, it was a beacon of hope. It turns out the treasure trove was not unique to the west of Ireland. Grocery shops throughout the Emerald Isle were fully stocked, having doubled their warehouse capacity in anticipation of Britain’s departure from the European Union.

Such preparation is a hallmark of Ireland’s approach to the pandemic. Prime Minister Leo Varadkar kicked off lockdown with a St Patrick’s Day address warning of a “surge” that was sure to come. But it never did. Daily numbers of new cases are hovering below 100 and on Monday the country reported no coronavirus-related deaths for the first time since March. Matt Damon, who was stranded in the seaside village of Dalkey outside Dublin when filming of his latest movie was cancelled, is a convert. He described his three-month stint in Irish lockdown as a “fairy tale” and Varadkar a “badass”.

Generosity explains the good reviews. Although nearly 30% of the working population is now jobless, the swift introduction of a 350 euro a week welfare payment has provided a lifeline to struggling families. Allied Irish Banks and Bank of Ireland, two lenders bailed out after the 2008 financial crisis, have also granted six-month mortgage holidays to customers under strain. The seamless approach is especially surprising given Varadkar’s shaky authority. His centre-right Fine Gael party came third in national elections in February. The messy result, which saw pro-unity party Sinn Fein winning the most votes, means the country has yet to produce a government. Varadkar’s sober, yet informative, briefings have given him a boost with voters.

Still, for some, the reopening cannot come fast enough. Michael O’Leary, whose 13 billion euro airline Ryanair plans to cut 3,000 staff, is demanding an easing of lockdown measures as he has little hope of recouping the vital summer season unless Ireland scraps its mandatory, two-week quarantine for foreign travellers. Ireland’s retail sector is also taking a hammering. Dublin’s Grafton Street, described by James Joyce in “Ulysses” as “gay with housed awnings”, is today ghostly quiet as retailers employing 13% of the country’s private workforce have shut their doors. The crisis has led to the permanent departure of department store Debenhams.

That makes Ireland more reliant than ever on the deep pockets of foreign companies. Thanks to attractive corporate tax rates, the country has lured more than its fair share of American multinationals and tech giants like Facebook, Alphabet-owned Google and Twitter. And far from operating shell companies, they employ more than 245,000 people, and just 10 firms contribute 7% of Ireland’s total tax haul. With the economy stalled, these workers are being paid full salaries – and pay taxes which will only partly ease some of state’s financial burden.

A creamy pint of Guinness looks a long way off. Pubs are among the last group of businesses that will reopen in August, the tail end of a summer season that typically carries bar owners through the leaner winter months. Still, such caution is necessary. Small, close-knit communities are still anchored by village pubs, where spontaneous sessions of traditional Irish music draw large crowds into tight spaces. There is still no clear plan for how these businesses will operate when some are too narrow to accommodate the two-metre distance recommended to avoid infection.

Loosening the grip on one of Europe’s most severe lockdowns will be a difficult task. By inching out, the government hopes the virus will have all but passed and life can get back to normal. But Ireland is reliant on foreign investment and visitors that boost its economy. More than 11 million tourists visited sites like the Aran Islands, spending nearly 6 billion euros, according to the Dublin Chamber. The temptation to lure them back is strong. A second wave of infection, however, would test the smiles of Irish eyes.


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