Ireland’s Economy is in Bad Shape

Until 2008, Ireland was considered as Celtic Tiger of Europe. Now, it is one of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) countries of Europe.

During its boom times, until two years ago, Ireland enjoyed unprecedented economic expansions and surge of productivities. Due to low taxes and educated English speaking workforce, multinational corporations like Microsoft, Pfizer, Google and others established offices here. There was a property boom with the flooding of foreign money.

But when the worldwide Subprime Loan Crises occurred, and with Ireland's government too much dependence on property sales and taxes, it's budget deficit ballooned. It costs 50 Million Euros to run the state, and with revenue of 30 Million Euros, the Ireland government must borrow to cover up the budget deficit, and must implement costs cutting policies. Ireland's public servants have to endure 20% pay cuts, reduction of benefits and increases in taxes. Many believe that its 13% unemployment is alarming. Its 13% unemployment means that one out of three of the under 30 years old working population has no job.

During the boom times, it spent on infrastructures, schools and roads, which now have all stopped. While other countries are pouring in money to stimulate their economies, Ireland has no choice but implement drastic austerity measures. Bank bailouts are so enormous for this small country of 4 million people. Its national debt is more than 50% of its GDP.

Many blame these economic woes to the trio of politicians, bankers and developers. They created a real estate bubble by offering huge tax discounts on new buildings, to stimulate the construction activities. These produced many ghost villages, when the real estate bubble burst.

According to a research, the top 20% economic class incomes was affected by 6%; while the lower 40% economic class incomes was affected by 2%. In fairness, the rich were affected more than the poor were.