![Page 1: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/1.jpg)
Europe: Ireland the Economic Miracle
Victor Lindeberg (Sweden)Victor Gustafsson (Sweden)
Graeme Russel (Scotland)Ville Majander (Finland)
Benedikt Scheckenbach (Germany)
![Page 2: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/2.jpg)
Agenda Introduction Background
› History› Religion
The Celtic Tiger Cause
Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics & Geopolitics
Effects Economy Demographic & Social Housing Bubble
The Downfall - End of the Celtic Tiger 2001-2003 Conclusion / Outlook
![Page 3: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/3.jpg)
The Island of Ireland
![Page 4: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/4.jpg)
Quick facts 4.6 million Inhabitants Official languages: Irish / English Constitutional Government GDP per capita: 38,500 $ Unemployment rate at 14% Public debt: 94.2 % of GDP 157% of GDP Import/Export
![Page 5: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/5.jpg)
Quick facts Cont`d
1801 Part of the UK 1922 Indepence 1973 Member of the EU Partition of the Island
› Republic of Ireland› Northern Ireland
High level of education
![Page 6: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/6.jpg)
History of Ireland.-A brief overview.
First settlement – 8000BC Christianity 5th century AD Viking troubles 800 AD Ireland becomes English. Henry VIII
ca1530. 17th century Plantations The first “Great Famine”
![Page 7: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/7.jpg)
United Kingdom of Great Britain and Ireland
The second “Great Famine” The Irish war of Independence Northern Ireland & the Irish Free State The Troubles The national flag of the republic
History of Ireland.-A brief overview.
![Page 8: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/8.jpg)
Hofstede‘s Cultural Dimension
Power Distance Individualism Masculinity Uncertainty Avoidance
![Page 9: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/9.jpg)
Hofstede‘s Cultural Dimension
Ireland China India USA0
102030405060708090
100
PowerdistanceIndividualismMasculinityUncertainty Avoidance
![Page 10: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/10.jpg)
Celtic Tiger Introduction
![Page 11: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/11.jpg)
The Celtic TigerWhat happened?
1980s• Strong FDIs• Reputation
for high-quality manu-facturing
1990s• Develop-
ment of clusters in:
• Chemicals• ICT• Pharma-
ceuticals
2000s• Advanced
Manufactur-ing with high R&D content
1970s• EEC
Membership• Adapted
educational system
1960s• IDA grants• Low
corporate taxes
![Page 12: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/12.jpg)
EU impacts Joined the European Economic Community
(EEC) in 1973
In the end of the 1970s Ireland took action against currency fluctuations and joined in the European Monetary System
In 1999 the country entered the European Monetary Union
![Page 13: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/13.jpg)
EU impacts Being a member of the EEC/EU resulted in EU-
backed aid money:Investments were done in:› Agricultural sector› Telecommunication› Education› Infrastructure/High-technology
High-technology related TNCs started to view Ireland as a suiting and appropriate link between the U.S. and Europe
![Page 14: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/14.jpg)
EU impacts Ireland compared to U.K.
› U.K. left the European Exchange Rate Mechanism (ERM) in 1992
› U.K. did not join the EMU
› TNCs preferred an English speaking country that was part of the euro-zone, instead of one that was not
![Page 15: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/15.jpg)
Corporate taxation in Ireland
Low taxation policies pursued by governments from 1956
10% on profits from 1981-2003 12.5% on profits for trading income 2003-
25% for non-trading income Resident companies pay corporate tax on
global income Non-resident companies pay on Irish-
sourced income only
![Page 16: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/16.jpg)
Corporate tax in the EU 23.2% Average corporate tax in 2010 Developed countries tend to have
higher rates› Austria: 25%› Finland: 26%› France: 33.33%› Spain: 30%› UK: 20-27%
![Page 17: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/17.jpg)
Corporate taxation in the World
![Page 18: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/18.jpg)
Unique possibility Low taxation originally possible due to
lack of industrial base› Lowering taxes is difficult
Deficits, cuts in established government programs
Impossible for countries with heavy industrial base
› Industry requires infrastructure taxes required for upkeep
![Page 19: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/19.jpg)
Effects of Ireland’s tax-policy
Low taxation attracts FDI› Major MNC’s established in Ireland
E.g. Google, Dell, Intel, Microsoft Transfer of profits to Ireland (Tax-
avoidance)› Today, still used to lower tax liability › Transfers not taxed for non-resident
companies Comparably low income tax
› Attracts skilled labour
![Page 20: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/20.jpg)
Industrial Policies Subsidies & Investment capital
› Irish Government subsidises investment in Ireland
Enterprise Ireland› Provides support services for startups
Financial, Technical, Social International Financial Services Centre
› 14,000 high-value jobs› Favourable tax-rate from 1987-2005› Offices for half of the world’s 50 top banks
![Page 21: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/21.jpg)
Geopolitics and geography Adaptation of government-funded higher
education
Investments were made to expand the Regional Technical Colleges and for the building of two new universities
Large share of technical and science graduates
![Page 22: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/22.jpg)
Graduates
![Page 23: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/23.jpg)
Geopolitics and geography Ireland had relatively high birth rates
during the decades leading up to the Celtic Tiger period
Large proportion of women outside the work force during the 1980s resulted in an enlarged labour force
![Page 24: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/24.jpg)
Geopolitics and geography Making Ireland accessible:
› Deregulating the airline market between Ireland and U.K.
› This resulted in an increase of passengers, tourist earnings, employments and further cut costs for business people
› The IT/technology-industry itself
![Page 25: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/25.jpg)
Real GDP per capita
![Page 26: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/26.jpg)
Annual GDP Growth
![Page 27: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/27.jpg)
Effects: Economy Rapid GDP growth
› 7.8% to 11.5% from 1995 to 2000› 4.4% to 6.5% from 2001 to 2007› Some gains wiped away in the recession
Unemployment fell from 18% in the late 1980’s to 4.5% in 2007› Currently 14%...
Debt/GDP –ratio fell› Level of Debt remained constant but GDP
rose
![Page 28: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/28.jpg)
Government debtas a ratio of GDP
![Page 29: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/29.jpg)
The stock market ISE surged from under 2,000 points to
a high of over 10,000 points › Currently at around 2,600
![Page 30: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/30.jpg)
Employment Unemployment decreased from 18% in
late 1980s to as low as 4.2% in 2000 Economic boom created jobs and had a
positive impact on the labour force; increased from 1.2 million in 1993 to 1.8 million by 2003
MNC’s accounted for 47% of manufacturing employment – Ireland dependent on MNC’s for growth and employment
![Page 31: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/31.jpg)
Unemployment Rate
![Page 32: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/32.jpg)
Immigration During 1990’s Irish population could not
fill positions offered by the MNC’s – negative employment rate
The economic success of ‘Celtic Tiger’ encouraged return of Irish emigrants as well as skilled labour from across Europe
In 1996, for the first time in its history, Ireland had a positive net migration rate
Demand for labour across various sectors, including construction, finance, IT and healthcare
![Page 33: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/33.jpg)
Social Inequality Economic success can be
contrasted with overall effect on society
High poverty rate compared to other EU member states
The ‘at risk of poverty rate’ increased between 1994-2005
Disparity of income and unequal distribution of wealth epitomised by Michael O’leary
![Page 34: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/34.jpg)
Housing Sector 20 % of complete GNP during the boom
![Page 35: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/35.jpg)
Construction Constructions of new buildings Employment:
126 000 (1998) 282 000 (2006)
![Page 36: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/36.jpg)
Banklending 110 Billion Euro in Mortages Collapse in 2008
![Page 37: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/37.jpg)
Houses Collapse after 2008
![Page 38: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/38.jpg)
End of the Tiger 2001-2003 downturn – effect on Irish
economy Contributing factors to recession Government attempt to maintain
growth MNC’s leaving a sinking ship Effect on housing Market
![Page 39: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/39.jpg)
Ireland today.-A brief summary.
Recession since 2008 Irish Banking Scandals Unemployment an all time high Mass emigration
![Page 40: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/40.jpg)
Conclusions Lessons from the phenomenon
› Competitiveness via policies and taxation› Value of education› Applicaple to other countries?
Baltic-countries? Emerging Asian countries?
Risks› Sudden collapse detrimental effects› May compund social inequality
![Page 41: Introduction Background › History › Religion The Celtic Tiger Cause Introduction of the Euro & EU Aid Taxation & Industrial Policies Demographics](https://reader036.vdocument.in/reader036/viewer/2022062905/5a4d1ae57f8b9ab059978d7e/html5/thumbnails/41.jpg)
Thank you for your attention