Celtic Tiger to Celtic Tories would seem an apt way of summing up the story of Ireland in recent times. From poster child of free-market globalisation everywhere from Hungary to Honduras, the UK's nearest neighbour is now enforcing the most savage cuts in public-sector pay, child benefits and social welfare payments of any EU government. Such is the level of misery being endured by the increasingly bewildered citizens of this little republic that even Brian Lenihan, the man principally responsible for inflicting it, has publicly acknowledged that fellow Europeans are "amazed at our capacity to take pain". The finance minister added, slightly boastfully: "In France there would be riots if you tried to do this."

Lenihan's last budget, delivered shortly before Christmas, was so draconian that the Daily Telegraph took to hailing him as a role model for the British Chancellor. Inevitably, this led to him being branded "Iron Brian" back home, though he will doubtless be spared Margaret Thatcher-style demonisation as he has since been diagnosed with pancreatic cancer.

Instead, the nickname will probably now be pinned on the premier, Brian Cowen, who has responded to the current crisis pretty much as David Cameron and George Osborne advocate. Alone among the leaders of advanced industrial nations, Ireland's two Iron Brians rejected the Keynesian case for a fiscal stimulus to keep the economy moving and set about inflicting a scale of pain from which even the new Tories might flinch momentarily.

Since the onset of the credit crunch in mid-2008, Dublin has delivered three slash-and-burn budgets estimated to have sucked about 5 per cent out of the nation's GDP. Exacerbating rather than alleviating the rapid meltdown in its private sector, such retrenchment could contribute to an astonishing 15 per cent shrinkage in the Irish economy overall – the sharpest contraction experienced by any advanced industrial nation in peacetime. Read full article in the New Statesman...