Hey everyone,

I want to present you the economic situation of Ireland:

Crisis

As perhaps some of you knows, Ireland have known an austerity policy since 2008 and, by an International plan (International Monetary Fund and European Union), have been saved to the bankruptcy in 2010. Nowadays, Ireland rear its head. Indeed, their economy grew 4.8% in 2014, the fastest pace in Europe according to The Wall Street Journal. Even if there was a reduction during the last month of 2014, this dynamic should continue in 2015.

In fact, Ireland forecast a growth of 3.5%. According to Alan McQuaid, economist at Merrion Stockbrokers, “Ireland benefit from its closely commercial link with United States and United Kingdom, two of the principal motors of the global growth during the last twelve months”. Moreover, there is also a development of the local demand for the first time since 2010. Finally, the loss of the euro should be an opportunity for the industrial competition base in the country.

Nevertheless, those numbers have to be taken with precaution. Actually, there is a large amount of multinational in Ireland in pharmaceutical and communicable technologies especially, and their result depend on the conjunction of the country. These 6 years of austerity was marked by a rise of the taxes, the creation of a property tax, the low of 11% loyal servants’ wage… The government had also chosen to tax the drinkable water while nowadays these measure causes many manifestations. Otherwise, the Anti-Austerity Alliance (AAA), an extreme democratic movement created in 2014, covet to be like Syriza in Greece or Podemos in Spain. Ireland get a safeguard plan at the end of 2013. They obtained a partial restructuration of their debt, which high at 114.8% of the Gross Domestic Product (GDP).

Manifestation on the drinkable water

Fiscal Paradise

According to the newspaper Forbes, Ireland is the Sixth best Fiscal Paradise all around the world. There is three steps to elaborate this rankings:

“First we had to determine what places were secrecy jurisdictions. To do this we created a « list of lists » looking at tax haven listings over a period of more than 30 years and selecting for testing, broadly speaking, all those that came on two lists or more over that period. Then our team researched data on a wide range of issues–about 200 variables per location. 

Then, twelve criteria were selected as key indicators of opacity, varying from whether there was formal banking secrecy or not, to whether accounts were required to be on public record, to how many tax information exchange agreements the jurisdictions had. The place got a mark for being opaque and none if it was transparent. Next we had to determine the amount of cash flowing through each location using International Monetary Fund data.

Combine the two rankings (deploying a little mathematics along the way, I admit) and you get the overall top 10 list. These are the 10 most significant secrecy jurisdictions in the world, in the opinion of the Tax Justice Network: the U.S. (Delaware), Luxembourg, Switzerland, Cayman Islands, the U.K. (City of London), Ireland, Bermuda, Singapore, Belgium and Hong Kong”.

Ireland's idyllic landscape belies its savvy financial sector

Ireland offers interesting financial conditions. It's called the "double Irish" in the financial world: A company founds two subsidiaries in Ireland with its business tax rate of 12.5 percent. Then, one claims to be based in a different tax haven (Comparable taxes in the United States, for example, are around 35 percent). While the one company does business in Europe, it pays the other patent fees. Profits vanish, as costs and income equal out on the balance sheet. This is completely legal in Ireland, and therefore an optimal location for companies such as Google, Apple or Amazon.

I hope you enjoy this article on the Ireland’s economy,

Cheers,

Victor ^o^

 PS: In Ireland it is very sunny since two weeks (20 degrees), a friend of mine visit me so I am very happy to share some time with her and the other Erasmus