On the euro region’s western edge, a small town is determined to benefit from the debt crisis.
The Irish border town of Dundalk, where economic recession has left about one in five stores vacant or for sale, is erecting 10-feet-high billboards with a message for its neighbours in the U.K. province of Northern Ireland five miles away: “Your Pound Goes Further in Dundalk.” Parking meters and shopkeepers are already accepting British money.
“I’d rather it wasn’t this way,” said Paddy Malone, head of Dundalk’s chamber of commerce. “But it’s tough times, really tough times. Sterling will help.” Northern Ireland still uses sterling after being partitioned from the rest of the country in 1922 and kept under U.K. control.
The euro has slid 10 percent against the pound during the past 12 months as European leaders struggle to contain the sovereign debt crisis that threatens the single currency. Ireland was the second euro country to need an international bailout, after Greece. Its economy has shrunk about 15 percent since 2008, the worst recession in its modern history.
For Dundalk, where the jobless rate is around 19 percent, the weaker euro is providing a boon as cash-strapped Northern Irish travel to buy cheaper goods.
“We’ve seen an uplift in Northern customers over the past couple of months,” said Laura Corry, manager of Sally West, a ladies fashion store in Dundalk’s main street offering 50 percent reductions to shoppers. “It’s definitely because of the euro. It’s great. Things have been tough here for a long time.”
Irish retail sales have fallen by almost 20 percent since June 2008, according to data from the country’s central statistics office.
In Dundalk, a town of 35,000 people centred around a square which was redesigned in 2011, charity stores selling used goods proliferated as retailers went out of business, according to the town’s commercial manager, Andrew Mawhinney. Small traditional Irish pubs sit next to derelict store units with retailers offering as much as 70 percent discount to lure shoppers.
“There has been a notable difference with Northern Ireland shoppers over the past couple of months,” says Harry Trainor, manager of Marshes, the town’s main mall. “It’s probably up around 7 percent. It all helps.”
Still not all of Dundalk’s retailers are confident of feeling the benefits of the euro’s decline.
“Even with the drop in the euro we haven’t seen much of a change in trading,” said Jacqueline McParland, whose shop, The Gift & Art Gallery, sells giftware and home items such as scented candles. “It’s probably as tough as I remember it. I’ve been here for 20 years. Of course any extra help is welcome.”
Dundalk’s campaign to entice Northern Irish shoppers mirrors Newry, a town on the U.K. side of the border that in 2008 had a boom when Irish shoppers went North looking bargains when the pound fell 23 percent against the euro that year.
“There has always been a trade-off,” said Orla Jackson, head of Newry’s chamber of commerce. “The exchange rate is part of the cycle of living on the border.”
Malone at the Dundalk chamber of commerce will be overseeing the erection of the signs this weekend and shopkeepers will be given miniature versions of them to display in their windows. He is confident the town can benefit.
“This could be very good for us,” Malone said.
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