Economy of the Republic of Ireland
Industry and Energy: 25.9 % (2010) Construction industry: 5.5% ( 2010) Commercial transportation, communication: 16.9 % (2010) Financial services: 26.8 % (2010) Other services: 22.4 % (2010)
The Irish economy is heavily export- dependent, major trading partners are the United States and the United Kingdom. Until the financial crisis, Ireland had an above-average economic growth, but since 2008 /09, the economic situation deteriorated dramatically.
- 4.1 The independent state
- 4.2 The Irish Economy in Transition
- 4.3 Celtic Tiger
- 4.4 economic crisis since 2007
The financial system is dominated by the banking group of Allied Irish Banks, Bank of Ireland, Ulster Bank ( a subsidiary of Royal Bank of Scotland Group ) and the National Irish Bank ( subsidiary of Danske Bank). The Irish Life and Permanent is significant not only in banking, but also in the insurance business. Dublin is home to a securities exchange, the Irish Stock Exchange, listed on the approximately 50 companies.
In Ireland -based airlines, for example, Ryanair, Aer Lingus, Aer Arann, Air Contractors and its subsidiary are City Jet Air France. In particular, founded in 1985, Ryanair increased with increasing deregulation of civil aviation within the EU - for example as part of the Open Skies Agreement - the leading low-cost airline in Europe on.
Beef and dairy products are the main agricultural export products with approximately 60%. In the year 2002 445.000 tons of beef valued at € 1,185 million were exported, which is why Ireland was the largest exporter of beef in the EU and one of the largest in the world.
Founded in 1961, The Irish Dairy Board, the marketing organization of the Irish dairy industry, is running under the name " Kerry Gold" Irish dairy products worldwide.
The company Kerry Group is the most important Irish companies in the food industry. It is the world market leader in food additives and flavors, but also a major producer of branded products for the Irish and UK market.
Mining and gas extraction
In Ireland, there are important European mines in which zinc and lead are encouraged ( Galmoy, Lisheen and Tara ). Major natural gas fields are the Corrib gas field and several years longer exploited Kinsale gas field. In the Celtic Sea, the gas / oil field Barryroe 2012 has been found that is close to the exploited Kinsale gas field. Also, some smaller, internationally operating resource company headquarters and listing in Ireland.
The pharmaceutical industry is responsible for over half of the exports of Ireland.
The independent state
With the Anglo - Irish Treaty of December 1921, the Irish Free State in 1937 the today's Republic of Ireland was followed. William Thomas Cosgrave ( 1922-1932 ) was still pursuing a relative free-trade policy, but subsequent governments have been more concerned with the economic and political independence of the country. So led his successor as Taoiseach, Éamon de Valera, high import duties in the course of the Anglo -Irish Trade War ( 1932-1938 ) a what agribusiness hurt massively. The average customs duties rose from 9 percent in 1931 to 45 percent in 1936. On the other hand benefited the urban population of these measures, industrial production rose 1931-1938 by 46.1 percent. However, demanded in 1932 enacted law, Control of Manufactures Act, that the majority shareholding company must be Irish-owned. Companies also were up in the 1970s, bought by the state and continued or it was purchased government involvement. These included the Agricultural Bank ACCBank (1927 ), Irish Sugar (1933 ) Aer Lingus (1936 ), the life insurer Irish Life (1939 ), Irish Steel (1947 ) and the natural gas company Bord Gáis (1975). The economic policies of several times alternating Prime Minister Éamon de Valera and John A. Costello ( 1932-1959 ), was economically very successful. In the years 1948 to 1952 Ireland received through the Marshall Plan technical assistance, loans and grants worth a total of 146.2 million U.S. dollars.
The Irish economy in transition
The Government of Seán Lemass ( 1959-1966 ) promoted the economic relations with foreign countries, since 1959 or 75 percent of all exports went to the United Kingdom. Ireland joined in 1960 by the General Agreement on Tariffs and Trade (GATT ) and the Anglo-Irish Free Trade Agreement was signed on 15 December 1965. In the 1960s, has been set up with government support an export industry. Condition was the modification of the valid until 1958 Control of Manufactures Act in the sense that export-oriented industrial companies no longer had a majority are under Irish control.
The first application for the July 31, 1961 failed to join the European Community. The application for accession to the European Community on 10 May 1967, on the other hand successfully and were able to begin contract negotiations in June 1970. On January 22, 1972, the contract with the EC was signed and approved in a referendum. The accession took place on 1 January 1973.
The fixed exchange ratio between the Irish pound and the pound sterling of one to one ( since 1928) has been repealed by Ireland's membership in the European Monetary System on 30 March 1979. For Ireland, which was problematic, since 1978 around 50 percent of all exports and imports accounted for the United Kingdom.
In the late 1970s and the early 1980s, the second oil crisis (1979 /80) led to a decline in economic growth. In the years 1977 and 1978 the economy was still increased by more than 7 percent, but then fell to 1982 to 2 percent to 3 percent back to 1983 even with -0.24 percent to be negative. Inflation rose from just over 10 percent in 1979 to about 20 percent, where it stayed until 1983 and until 1985 was under 5 percent. Due to the poor economic development, ineffective spending and the abolition of wealth tax in 1978 the national debt rose under the government of Jack Lynch and their successors greatly. In response to the crisis, his successor Charles J. Haughey and Garret FitzGerald began to cut spending and increase tax rates on the income of employees significantly. The lowest income tax rate was abolished, which already were in a low income tax bracket of 35 percent. The tax revenue but also more educational programs were funded, especially in the later economically important sector of communications technology.
Between 1995 and 2007, Ireland's GDP grew by an average of 6 percent per year, which is why Ireland has often been referred to as the " Celtic Tiger". The development of GDP was strongly influenced by foreign direct investment in Ireland. In particular, from the U.S., it came looking for a location for export to the European Economic Area to invest in Ireland. As of 1989, invested companies such as Dell, Intel and Microsoft in Ireland and were formed from the early 1990s cluster of communications technology industry. The Irish government succeeded by the new revenue and to reduce the national debt. They fell from over 90 percent in 1993 to under 50 percent in 1999. In the 1990s, the corporate tax was aimed at attracting foreign companies significantly reduced. The standard tariff fell from 40 percent (1995 ) to 12.5 percent in 2003. It also a reduced rate for manufacturing was introduced by 10 percent (now unified to 12.5 percent, which is still one of the lowest values within the EU means ).
However, GDP was artificially increased because profits are shifted from the company because of the low tax rates partly only accounting to Ireland and did not really flow into the country. The inflation-adjusted per capita GDP rose to one of the highest in the EU. Gross national income rose less sharply, however, among other things, unemployment increased from actually (2000-2007 amounted to about 5 per cent ). By the 2000 established legal minimum monthly income is not less than 1,183 euros in adult full-time employees.
It came from the late 1990s to greater immigration to Ireland. Many Irish went back to Ireland and especially after the EU enlargement came from Eastern Europe, many immigrants. The population increased from 3.789 million inhabitants in 2000 to 4.339 million inhabitants in 2007.
Due to continued low interest rates and low regulation of banks was increasingly investing in leveraged real estate in the mid- 1990s. The subsequent expansion of the financial and construction sector led to a housing bubble. The number of newly built houses annually increased from 33,600 (1996 ) to over 93,000 (2006). At the same time, prices rose the national average almost four times. Ireland became one of the countries with the highest home ownership rate in the world.
Economic crisis since 2007
Ireland is particularly hard hit by the world financial crisis and the subsequent Euro - crisis, because the long time successful real estate business and dependence on foreign direct investment were negative factors. With the falling house prices (2009: 20.7 per cent to 242 033 euros ) many Irish households are over-indebted.
The sum of outstanding loans, derivatives and mortgage loan barely regulated Irish banks exceeds the gross domestic product almost fourfold. End of 2009, the State National Asset Management Agency (NAMA ) was founded as a bad bank and took over so far ( June 2010) of the five participating companies (Allied Irish Banks, Anglo Irish Bank, Bank of Ireland, Irish Nationwide Building Society and EBS Building Society ) liabilities valued at 81 billion euros. Some companies received government guarantees, other companies state capital assistance and in return the state took over shares of them. The Anglo Irish Bank was nationalized even completely. Since the Irish government expended a lot of money on the financial support of the Irish banks and building societies, the public debt rose sharply. From 43.9 percent at the end of 2008, the national debt rose to 64.0 percent at the end of 2009 and is expected to be about 83.9 percent at the end of 2010.
The conservative Irish government under Brian Cowen decided to carry out against the massively rising debt for austerity measures. Since the first quarter of 2008, Ireland was in a recession, in 2009 GDP fell by 7.1 percent. The unemployment rate at the end of 2008 more than 8 percent and increased in 2010 to over 13 percent, and the number of long -term unemployed ( = more than 1 year without work ) has more than doubled to 5.3 percent. In addition, Ireland was in a deflation. In October 2009, prices fell compared with the same month last year by 4.4 percent.
Since early 2010, gradually CRAs Ireland gradually further and further down. The debt burden Ireland's end of June 2010 amounted to 731.2 billion U.S. $, of which U.S. $ 508.6 billion in European creditors. In the fourth quarter of 2010, rumors of an impending insolvency of Ireland and an impending application for EU aid came on that were rejected initially categorically by the Irish Government. Because the Irish financial and banking crisis (especially Anglo Irish Bank), however, asked Prime Minister Brian Cowen on 21 November 2010, the European Union and the International Monetary Fund for help. The EU finance ministers decided on 28 November 2010, a three-year aid package of 85 billion euros from the European stabilization mechanism, which applies Ireland 12.5 billion euros from the reserves of the state pension and 5 billion of cash reserves itself. The United Kingdom ( EUR 8 billion ), Sweden ( EUR 1 billion) and Denmark offer bilateral grants. There are now 10 billion euros are spent to increase the equity of banks, a further 25 billion euros are available. The other 50 billion is provided for the state budget, if they are needed. The Irish government also decided more drastic austerity measures: the increase in VAT, cuts in social benefits, savings in the public sector and the increase in various fees.
In the course of the euro crisis by Ireland for EU aid to be paid interest rate of 5.83 percent per year initially was lowered to about 3.5 percent and extended the term of the bonds over 15 years.
After Ireland was active in the capital market last in September 2010, Ireland has for the first time sold a bond worth 500 million euros with a maturity of 3 months on 5 July 2012. The average interest rate was approximately 1.8 percent, slightly cheaper than comparable Spanish bonds.
The Irish government of Enda Kenny gives a deadline for the withdrawal from the euro bailout fund at 15 December 2013. From this point Ireland should fully fund themselves again via the capital market.