Will 2019 be the hardest year Ireland has experienced since the crash?

A new year has arrived and it promises to be an extremely difficult one for Ireland.  Saying that is not intended to wreck your Christmas cheer or your New Year hopes for 2019­--it's a simple statement of fact. 

So let's look at the main challenges that lie ahead in the coming year.  

The big one, of course, is Brexit.  We should know in a few weeks whether British Prime Minister Theresa May's deal for a soft Brexit can win the delayed vote in the House of Commons.  Even if it succeeds that will still present some difficulty for this country.    

But if it fails -- and the odds are stacked against it -- then the chances of Britain crashing out of the EU in March with no deal will increase dramatically.  If that happens Ireland will then be faced with a daunting scenario, including lower or negative economic growth, lost jobs, chaos in our agri-food exports and much more, including the certainty that the border between north and south will return. 

  And the pain will be instant. Without May's soft Brexit deal, which includes a two-year transition period when the status quo will prevail and nothing much will change, it will be a sudden plunge into the abyss with Ireland dragged in as well.

The vast majority of MPs at Westminster do not want a crash out for their own reasons.  They know the impact on the British economy would be devastating for a number of years and possibly for decades.   

Read more: Irish passport office swamped by Brexit as one million seek citizenship

Theresa May. Image: RollingNews.ie.

However, there is a real danger that it could happen by default unless a solution is found to the big problem that is messing everything up -- the Irish backstop.  

As we have pointed out here before, the backstop -- the guarantee by both the U.K. and the EU that no matter what happens there can be no return of the border in Ireland -- has become the biggest impediment to a satisfactory Brexit for the U.K.  To avoid it, May's deal says that all of the U.K. will remain in the EU customs union until an alternative can be agreed which would make a border unnecessary. 

But Brexit supporters in the U.K. rightly see this as a situation that could drag on for years, meaning that a real Brexit allowing the U.K. to do independent global trade deals would be impossible.  As far as the Brexiteers are concerned it would be a pointless exercise. 

Although May's deal, which took two years to negotiate with the EU, does include some regaining of control for the U.K. on immigration and other matters, it is a long way from the clean break from the EU that the Brexiteers and the millions of people in the U.K. who voted to leave were expecting.  Which is why there is such opposition to the May deal in Westminster.  

Looking ahead, it seems clear that any solution to the impasse will have to mean a harder Brexit than that being offered in the May deal.  And that presents enormous problems for Ireland. 

Read more: Brexit as an opportunity to reevaluate the post-1920s division of Ireland

How will Varadkar and Coveney deal with Brexit in 2019? Image: RollingNews.ie.

So far, we have stuck to the position that the backstop is essential because any return of the border would threaten peace and stability in Ireland.  No one wants to risk a return to the violence of the recent past, and for that reason, our position is supported by all the political parties here as well as all the EU countries.   

But how long that position would be maintained in the face of an imminent hard Brexit is uncertain.  You won't hear anyone here saying that in public, of course, but that is the reality being discussed behind closed doors.    

The problem for us is that a border will be necessary if Britain leaves the EU with no deal because without one the Irish Republic could become an open back door for global produce into the EU.  To protect its single market and customs union, the EU would insist on a border in those circumstances.   

And some kind of border would be necessary even if the U.K. does not crash out but eventually negotiates a much harder Brexit than that in the May deal.

One way or the other, there seems to be no chance of a pain-free outcome for Ireland.  If the worst happens and the U.K. crashes out, we will immediately be faced with a real dilemma. 

If we want to remain in the EU, on which so much of our prosperity depends, including all the multinationals attracted here because we are in the single market, then we will have to agree to a border.  It's a grim scenario for us and one that no one here wants to see.  But there is no other answer to the Brexit conundrum.   

The most likely outcome, if May's deal is rejected in a few weeks, will be more delays and further negotiations with the EU, despite Europe's insistence that the May deal cannot be changed.  Even the date of Britain's departure at the end of March could be withdrawn.   

But whatever happens, time is running out.  Brexit is going to make 2019 an annus horribilis for Ireland no matter what we do. 

Homelessness in Ireland will be another major problem. Image: RollingNews.ie

The Brexit threat is the main reason given by Fianna Fáil for deciding a few weeks ago to extend its support for the minority Fine Gael government for one more year.  Of course, they have their own reasons for doing so -- mainly the fear that voters still have not forgiven them for the crash -- but it's true that no one here wants the distraction of an election in the uncertain year ahead.  We have enough on our plate without that.  

Despite saying repeatedly over the past year that he does not want an election for the same reason, Taoiseach Leo Varadkar is well aware that Fine Gael is ahead in the opinion polls.  He is also aware that things could get worse rather than better in the year ahead.  So no one is ruling out him going to the voters to get a stronger mandate.   

The other big issue that faces us in the year ahead -- one that would be hyped up in an election campaign -- is housing.  The government gets endless criticism on this, but the difficulty for them is that there is no quick and easy solution to the problem.   

The housing shortage is a legacy of the crash 10 years ago which brought virtually all construction here to a halt.  The recent economic recovery has started up construction again, but progress is painfully slow because of a shortage of finance, skilled workers and developers willing to build large-scale affordable housing estates.  The cost base here is so high that it makes more sense for them to build expensive housing, which most people can't afford.  

The result is that too many people are priced out of the market, and the number who want to rent has soared, leading to huge increases in rental rates.  Making this situation even worse, increasing restrictions and penal taxation have resulted in more Mom and Pop landlords getting out of the sector altogether.   

The cry from all sides is that the government must massively increase social housing immediately.  That would be wonderful if it was possible, but it's not because of the shortages mentioned above.  More social housing is being built but it will take years to catch up with demand.   

One consequence of this situation is the 10,000-plus people here (including children) who are homeless, in many cases people who have lost their rental accommodation because their landlord was selling or because they could no longer afford the rent, even with the state subsidy.

Having presented as homeless to local councils they are then put into emergency accommodation, single rooms in hotels and B&Bs paid for by the state, and many end up there for months on end.  Particularly when children are involved this is a miserable existence.  But at least they do not end up on the streets, although we do have a small number of rough sleepers here, just like everywhere else.  

Rather than using hotel rooms, the government is trying to get more homeless people with children into the new family hubs where there are shared facilities and more space for kids.  But even this is far from ideal.  

One of the difficulties is that on top of the housing shortage, there are changes in social attitudes and expectations.  A significant number of the homeless are young women with one or two children who have parents or relatives who, in years gone by, would have made room for them. 

These days it is often claimed that this is not possible because of overcrowding.  There are also cases where people deliberately declare themselves to be homeless so they can be pushed further up the social housing list. 

In addition to this, we have another situation that no one wants to face.  Only a tiny number of the nearly half-million social homes built by local councils since the state was founded are available for people in need of social housing today. 

Why? Because most were sold off to tenants at huge discounts over the years, and those that are still owned by the councils are unavailable because the next generation takes them over. 

Many council houses are occupied by an older couple and have unused bedrooms, yet there is no system for moving them into smaller units to free these up.   

All of which is an indication of how complex this problem is, something that is forgotten when emotive stories about the homeless appear in the media.  Building much more social housing will an important part of the solution to today's problem, but it is not the only one.  

No matter what the government does in 2019, housing will still be a major problem in the year ahead.  And it won't be any easier to solve if Brexit hits the state finances hard.  

For these -- and other reasons -- the year ahead could be the most difficult one we have faced since the crash here a decade ago.   

What do you think? Let us know in the comments section, below.