It may be one of Ireland's best-known exports, and must rank among the all-time favorites of maudlin Irish émigrés everywhere, as they cry into their Guinness. But over the past three years, we've heard a lot less of that sentimental standard, "When Irish Eyes Are Smiling."

And no wonder. "The Celtic Tiger Ate My Breakfast," might be the more appropriate refrain.

Greece has descended into chaos, Portugal is teetering, Italy has put chaos on hold for a few months, and other struggling euro-zone economies appear to be holding their breath.

But Ireland took its punishment on the chin, stoically accepting the austerity measures demanded by the European Union and International Monetary Fund in return for bailing the country out to the tune of €85 billion ($113 billion) back in 2010. Unemployment is now more than 14% -- still less than in Spain or Greece, but a disaster compared with a low of 3.7% in January 2001. Gross national product was down 2.5% in 2011, while gross domestic product was up 0.7%. Personal consumption, which accounts for roughly two-thirds of domestic demand, fell by 2.7%.

Enough of the gloomy statistics! Irish eyes have enough reason to be wet with tears without making them glaze over with endless numbers. And yet a surprising number of voices out there argue that Ireland has now done enough -- at least in theory -- to be on the road to recovery.

The Irish minister for finance, Michael Noonan, claims that the government (and its unloved predecessor) has created an "internal devaluation" of 16% since the start of the financial crisis by pushing down labor costs. Astonishingly, studies by Goldman Sachs Group Inc. analysts Andrew Benito and Lasse Holbøll W. Nielsen seem to confirm this. In their mid-March paper, "Achieving Fiscal and External Balance," they suggest that Ireland has already achieved sufficient internal devaluation against other euro economies -- accompanied by significant domestic deflation -- to recover competitiveness. By contrast, Portugal still requires a devaluation of 35%, Greece about 30% and Spain 20%, implying further massive losses of output.

No wonder Noonan recently felt able to assert that his country had become so competitive in this period of austerity that "if the world economy picks up, then Ireland can take off like a rocket."

Whether this rocket will be powerful enough to pull the country out of its gloom is a different matter. The onerous terms of Ireland's bailout have been tougher to renegotiate than Noonan has been ready to admit. And the previous government's disastrous guarantee to honor the debts of its bankrupt banks -- by taking them over as sovereign debt -- is a terrible burden on the Irish people.

No one can miss the striking contrast between the bank bailouts and last month's decision to allow the former state telecom monopoly Eircom Ltd. to fall into insolvency administration. The biggest bankruptcy case in the history of the Irish Republic, it set the company on the road to a debt restructuring that should reduce its €4.1 billion debt burden to €2.34 billion.

Yet no such mature capitalist solution was imposed at Anglo Irish Bank Corp. Ltd. According to the Irish Times, applying the same knife to Anglo Irish would have saved €4.2 billion in senior bond repayments alone. Virtually the whole of Ireland's banking sector was eventually taken over wholesale by the state, leaving the taxpayer to pick up the tab for debts that might otherwise have been written off.

Ireland has not been forced, like Greece or Italy, to suspend the normal trappings of democracy in favor of technocratic government imposed by the European Union. But the Irish government was told it would have to agree to the terms of Europe's restrictive and centrally administered fiscal pact to have any hope of renegotiating the terms of its bailout.

Not surprisingly, after a period of prosperity that started to reverse two centuries of mass emigration, more Irish people have once again been leaving the country than have been coming home. Net emigration last year reached 42,000 -- without counting a further 30,000 foreign-born residents who decided their prospects were better at home.

So the Irish are still not smiling. They may not be rioting, but they are considering voting against the fiscal pact in a referendum. And they are once again voting with their feet.