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The Celtic Tiger

The Celtic Tiger. (1) Multinational Investment: 70% of Irish exports, low corporate profits tax (2)Property Price bubble: construction accounting for almost quarter of national income by late 2000s

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The Celtic Tiger

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  1. The Celtic Tiger • (1) Multinational Investment: 70% of Irish exports, low corporate profits tax • (2)Property Price bubble: construction accounting for almost quarter of national income by late 2000s • Rising household and bank debt; 6 main Irish banks borrowed €15 billion from abroad in 2003, figure had risen to €100 billion by 2007

  2. Causes • Lax regulation of cross-border lending across EU • ECB low interest rate policies • Structural bias of EMU? • Irish government incentives

  3. Government response • September 2008 bank guarantee: “the Irish people woke up to find that the… government had put up the entire Irish State as collateral for the crushing liabilities of six private banks” (McCabe) • NAMA • Short-term liquidity loans to banks

  4. The price • Spending cuts and tax increases of €4,600 per person, and more to come • National income down 15% • Unemployment almost 15%, high emigration • Investment slump • Austerity underpinned by IMF-EU ‘bail out’ (December 2010)

  5. The scale and nature of the debt • Almost 300% of national income (debt audit finding) • Over 75% due to private bank debt – not (initially) a crisis of public debt • Anonymous bondholders • An illegitimate and undemocratic debt

  6. Limited protest • Emigration • Media • Election (February 2011) • Trade union leadership

  7. Stirrings of resistance • Rise in Left vote • Citizens’ initiatives • Calls for a referendum • Occupy Dame Street

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