Eastern Europeans explain draw of Ballyhaunis

The war in Ukraine may have led to a surge of refugees to Ireland but it’s also created economic challenges for Eastern Europeans who are driven to seek jobs in Ballyhaunis and surrounding areas. That’s according to a series of interviews by the Western People with Eastern Europeans who’ve moved to Ballyhaunis in the past decade.

Economic impacts from the war in Ukraine appear to have prompted a rethink by locally-based Eastern European workers who in the decade running up to the invasion of Ukraine appeared to be heading home, perhaps temporarily, thanks to a construction boom and a surge in foreign direct investment in neighbours of Ukraine like Hungary, Poland and Romania. In the 2010-2022 period, Bulgaria saw a 277% increase in the number of new dwellings approved for construction – the highest such figure in the EU.

Some of those who spoke to this column also explained that higher prices in Ireland are not necessarily a turn-off to living here because they’ve seen higher levels of inflation back home – though food prices remain lower but are reaching levels similar to those in western Europe, said the interviewees.

Overall prices rose by 28% across the EU from 2010 to 2022, according to Eurostat, and while they rose by 16% in Ireland in that time-frame the increase was higher in Hungary (53%), Lithuania (49%) and Romania (47%).

“Inequality has really become a problem at home,” explained a Hungarian national working in Ballyhaunis. “We are located nearer to Russia and when the war started energy prices and food prices rose, like 40 or 50% because companies said they had to find other sources for wheat and fuel. Rich people can absorb these price rises but not poor and lower middle-class people.” 

Irish wages are a main draw for all of the ten interviewees, who hail from ten separate states in central and eastern Europe and are living in Ballyhaunis. The gross monthly minimum wage of €2,146 in Ireland is the second highest in the EU, comparing favourably with Romania (€663), Latvia (€700) and Slovakia (€750). However, unemployment benefits in Ireland at 35% of earnings is lower as a percentage of income than in Bulgaria, which pays the individual 77% of the wage earned in their most recent job.

One of the issues that came up among all those interviewed was the social welfare payments and the burden carried by the state in Ireland in social protection payments. A Romanian national pointed out that Ireland’s model puts the state as the main guarantor of an employee who needs sick pay or unemployment benefits.

“This means payments are more reliable in Ireland if you get sick, because in Romania the employer and employees may not have paid the full amount [into the social security fund].” 

 Judging by data published by Eurostat, the EU’s statistics service, Ireland is an outlier in the EU in that the government pays 60% of the cost of sick pay and other benefits – only the Danish government pays more – whereas in Romania only 20% of the pot is contributed by government with employees and employers contribute the rest. In France, the state contributes 43% while the German government pays 34% of the money paid out in benefits to workers, with employers and employees contributing the rest.

Ireland’s spend on pensions as a percentage of GDP is among the lowest in the EU – all the Eastern European countries pay more – but as the country ages this will change and the scale of the pension bill will become a challenge for future governments who’ll have to keep growing the economy to keep pace with the rising cost of paying for an older population.

Another factor making Ireland attractive to migrants is the state pension, one of the more generous state pensions in the EU. The average monthly payment of €1,906 compares well with the EU average of €1,294 per month and well above equivalents in Lithuania (€394) Poland (€538), Romania (€382) and Bulgaria (€226 per month), according to data from the EU’s European System of Integrated Social Protection.

Ireland’s housing crisis is not necessarily off-putting to Eastern Europeans who face similar issues back home. Ireland has the highest housing costs in the EU – according to Eurostat, the cost of buying or renting a home here was 112% above the EU average in 2022, whereas Bulgaria and Poland were 67% and 60%, respectively, below the average cost of housing across the EU.

While rents in Ireland jumped by 84% in the period 2010 to 2022 (rents for a semi-detached house in Ballyhaunis have, in some cases, doubled to €1,300 in that time frame), the increases in Eastern Europe have been far higher, with a rise of 144% in Lithuania and 210% in Estonia.

Lower levels of social protection appear to be driving the rises in rents in Eastern Europe – certainly in the minds of Eastern Europeans who spoke to this column, who see Ireland as a better option. 

“We have lots of vacancy in Croatia but high rents because people hoard houses,” explained a native of Zagreb. “There is a different mentality there because our social welfare payments in Croatia are low and uncertain in the future... people have put their money into houses because they think that they’ll keep their value and there’ll be money if they don’t get a pension...there is more mistrust of government than in Ireland.” 

Across the EU, the highest levels of home-ownership are seen in Eastern member states like Hungary, Lithuania, Poland and Romania. Yet rent-to-income rates in major Eastern European cities are among the highest in Europe, as renters struggle to find and pay for accommodation.