As Christmas approaches, Christians will commemorate the birth of Jesus Christ, son of God. But, it seems his birthday is increasingly taking a back seat as shopping, the new religion of the people, dominates the festive agenda. Christmas now provides the springboard for people of all religious creeds to launch themselves into a shopping spree. Consumerism reaches its climax; the supermarket basket is swapped for the trolley. However, people are increasingly subscribing to the consumerist doctrine all year round. No need for the excuse of Christmas. This year, when the biggest shopping centre in Europe opened its doors in Dublin, record numbers of people flocked to this new cathedral, their wallets brought as sacrificial lambs. Confessions of the new addiction could be obtained unashamedly from all those who made their way to this new shopping altar. But society is on the brink of paying for the ultimate sin: personal debt.

Nowhere in the European Union (EU) has consumerism played such a vital part in economic activity as in Ireland. When the world went into recession following the attacks on the World Trade Centre, Ireland?s economy kept booming because of continued consumer spending. This year, the Irish public will spend a whopping ?4 billion over Christmas, a 10% increase over 2004, according to the Small Firms Association of Ireland. Furthermore, on 24th December, in the frantic and maddening rush to the big day, consumers will spend ?22 million an hour, to the glee of business owners. The Irish will be the most extravagant spenders during the festive season in the entire EU.

<B>Rising debts over income</B>

Where does all this money come from? One part of the answer lies in the fact that Ireland is the second richest country in the EU after Luxembourg, with a Gross Domestic Product (GDP) of $36 360 per capita in 2002 according to the United Nations study. It is the third richest in the world, even outdoing the United States, when the purchasing power equivalent is compared. While people earn a lot of money, they also spend a lot because of the high cost of living. A recent survey placed Dublin as one of the most expensive cities to live in, ahead of even New York and London. Furthermore, as the nineties brought huge amounts of money to the economy, a new hedonistic and materialist culture developed, especially in the urban centres (mainly Dublin). Coupled with this, high confidence in job security freed people from the anxieties suffered by their European counterparts and they could spend without restraint.

On the other hand, there has been the more worrying trend of borrowing to sustain the spending levels. In February, this year, the Irish for the first time owed more than they earned by 120%. That is, for every ?100 earned, ?120 would be owed to some financial institution. The level of personal debt in Ireland is now the third largest in the EU. While among the Organisation for Economic Cooperation and Development (OECD), its citizens are considered the 12th highest indebted at the moment, within 2 years, in 2007, they will have leapt to the third place. Collectively, the Irish owe a staggering ?85 billion, roughly seven times the ?12.5 billion debt levels of a decade ago.

How exactly the Irish accumulated such debts can be attributed to the housing boom of the last decade. As the economy stayed buoyant over the last ten years, banks and building societies were not afraid to throw money at their customers. Irish people borrowed en masse to buy houses, pushing the prices higher and higher, as demand outstripped supply.

House prices rose steeply during those years, with the average cost hovering around the ?270 000 mark. While this kind of debt is secure for the moment because property prices show no sign of falling and the long predicted housing bust is yet to happen, the problem lies elsewhere. In the last five years, the European Central Bank (ECB) has not raised interest rates. However, this month it announced a rise, predicted to be 0.5%, forcing Irish borrowers to surrender another billion euros annually.

<B>Credit card extravagance</B>

Another factor has also contributed to the rise in debts; the increase in non-mortgage debts, which mainly took place in the credit card sector. This year, the collective credit card debts owed by the Irish public will be ?1.8 billion. Of this, two-thirds are expected to be repaid late, with subsequent penalties further plunging the debtors into the red zone. Credit card debt followed the overall pattern, having increased six times over the last ten years. A recent survey by the Financial Regulator, showed that even bills as small as £500 can take up to 11 years to be paid, with the penalties and interests arising to nearly the equivalent of the amount owed.

Owing money is now a global phenomenon. Personal loans in the UK are estimated to have reached £1.1 trillion according to Credit Action, a charity that helps people to better manage their money. This year, the credit card division of Barclays Bank reported a 17% fall in profits as people struggle to repay their debts. As a result, it is now refusing 55% of card applications.

Card debts have seen some banks, including Barclays, agree on the sharing of information on their customers to hem the tide of growing unmanageable personal debts. In the other main centre of extreme consumerism, the US, the situation is even worse, with personal debts accounting for over $9 trillion.

There are two reasons why this trend in personal debts should worry Mauritius. One is the usual profligacy associated with hire purchase during the Christmas periods. The other refers to the increasing materialistic nature of the society. The last budget announced the direction, which has not been rectified by the new regime, wished by parliamentary majorities. It is that of a consumer culture to rival even the centres of capitalism. Within such a framework, debts could quickly rise as we try to outdo each other in the shopping centres.

<B>Diren VALAYDEN</B> Outlook Correspondent in Dublin