From the mid-1990s until the financial crisis of 2008, Ireland experienced an economic boom that made it known as the “Celtic tiger”. Today it cannot be identified with any specific animal, it is like an atypical entity that Noah forgot to put in the ark, or managed to get away. In some indices it is like a lion, in others it looks like a lamb.
The presence of more than a thousand pharmaceutical, banking and high-tech multinationals (Google, Apple, Pfizer, Amazon, Facebook, Twitter, Linkedin, TikTok, Intel, IBM, Yahoo…), which do not produce in the country but they do have their registered office for the purposes of declaring profits and paying taxes on them, conditions the Irish economy to such an extent that it cannot be measured by conventional standards. GDP means nothing, because it includes what these companies generate at an accounting level, as if it were distributed among all citizens, which is not true. He makes it appear that a Cork or Dubliner is richer than a Londoner or New Yorker, and earns twice as much as a German, a Frenchman and an Italian when he isn’t at all.
The very competitive corporate tax of 12.5% ??(15% from next year for companies with more than 700 million euros in annual revenue) is also a distorting element of the statistics, because it makes the numbers dance. based on their overall gains or losses from circumstances that actually have very little to do with Ireland. The GDP hits some brutal jumps. In 2022 the economy grew by 12.2% (the envy of the world), in the first quarter it shrank by 4.6% (also an unreal figure), now it has taken a breather again and an increase is forecast for the year as a whole 5.5% (and 5% by 2024).
Ireland has risen to second place in the world competitiveness ranking prepared by the Swiss business school IMD -behind only Denmark-, for its “agility and competitiveness in the current unpredictable environment, with a robust economy, boost after the pandemic , fiscal attractiveness, sustainability of their accounts, employment metrics, foreign investment, domestic demand, infrastructures, training and educational level of the workforce, command of English, international image, ability to attract talent, legal certainty, exports of services and business-friendly environment”.
Much of this responds to indisputable statistics, such as the 12,000 million euros per year in corporate tax (courtesy of multinationals), inflation of 8.1% (which is estimated to fall next year to 2.4% ), an increase in investment of 25.9% last year and unemployment of 4.3%, which is practically insignificant. Things must not be bad when for the first time in a long time there are more Irish people coming home than going abroad. But the memory of the bubble that burst fifteen years ago, and that made it necessary to bail out international institutions under abusive conditions, still weighs heavily.
Behind the objective competitiveness of the Irish economy are hidden important social problems such as access to healthcare and public services, a lack of workers in certain sectors, few childcare centers, energy dependency, dysfunctional urban planning regulations and, above all, the living place. The “invasion” of bankers and employees of high-tech companies from the so-called “silicone dock” in Dublin, with high salaries and purchasing power, has meant that there are currently only 959 rental houses on the market in the capital , with prices similar to those of London or Manhattan. The average price of a flat in the country as a whole is 1,500 euros per month, inaccessible to the vast majority of Irish people. The number of homeless people is constantly increasing and now stands at twelve thousand, even though there are thirty thousand empty buildings. A sector traditionally in the hands of the State has come to be controlled by speculators and vulture funds. Investment in infrastructure in the last decade does not correspond to the additional demand generated by the creation of half a million jobs, and that in 2022 the country recorded a budget surplus equivalent to 1.6% of GDP.
Reluctantly, and after resisting like hell (it was one of nine nations that initially rejected the deal), Ireland has accepted the framework of a minimum 15% corporate tax on large global corporations (for the rest it will remain the same). 12.5%), but with enough lightning rods for these giants to continue paying their taxes in the country, and not where they sell their goods and services, which is what was intended. There will be an economic cost, although it will be relatively small (two or three billion euros per year) and manageable. The model will remain the same. Some eight hundred US companies invest more than twenty billion euros annually, employing 180,000 workers directly, and another 150,000 indirectly.
Fiscal certainty has always been one of the reasons why Ireland is attractive for business, to the point that the government refused after the 2008-2010 crisis to raise taxes to obtain a bailout from the International Monetary Fund, instead Instead, he preferred to assume the political and social cost of reducing the minimum wage and imposing draconian austerity measures that left social services in a skeleton and dented the savings of the long-suffering middle classes.
The Irish economy is so atypical that institutions and experts can’t even agree on its competitiveness. It is obvious that it is attractive for multinationals, but a recent OECD report indicates that for small companies and individuals not so much, far from it, if one takes into account the global pressure as a whole, and taxes such as that of the income (there are only two bands, twenty and forty percent, with nothing in between), inheritance, wealth and VAT. Incomes of more than 50,000 euros per year (18% of the population) contribute 75% of what the Treasury coffers receive.
Two centre-right parties (Fianna Fail and Fine Gael, now in a coalition) have dominated Irish politics in the century since independence. But Sinn Fein, the former political arm of the IRA, is widely leading the polls ahead of the 2025 elections and presents itself as a socially progressive movement, whose priority is solving problems such as housing, attractive to young people. Their goal is reunification.
It would be a greater economic revolution than German integration, since Northern Ireland has a very low productivity index, its deficit is the highest of the four nations that make up the United Kingdom, and it is subsidized with twelve billion euros a year by London (money that Dublin should assume at a cost of five points of GDP). As an abstraction, 66% of the Irish agree with reunification. But if they are told that this would mean a tax increase, 54% oppose it. It is not known what animal the ancient Celtic tiger is now, but it knows how to do the math.
