A small European country holds its people the growth of a “heavy” eurozone. If cold statistics take place without debugging, this country has become several years in a certain Saudi Arabia of Business Manuals. As in Saudi Arabia with oil, there are thousands of million in this country who enter their economy through the advantages of companies, but, unfortunately, only a small part of this amount arrives for one way or another for citizens. However, His economy, in statistical terms, is launchedThe field is the largest economic miracle in Europe from the point of view of GDP per capita and, it seems, continues. Looking at the details of the GDP of the eurozone, the figure is distinguished above the rest: 9.7% of the herald of Ireland. The country that represents only one hundredth population of the European Union was responsible for more than half the growth of the block. An observer familiar with economic statistics may seem to him that Ireland found oil when no one noticed. Nevertheless, a small country has a problem: this money that is part of He prevented Ireland from building a sovereign background, such as Norway or Saudi Arabia… And now, when Donald Trump threatens to put an end to the privileged status of the island, Ireland may not have enough time for another … After he spent everything.
“Reality is not so far from this idea,” they say from the weekly Economist In a recent article. In recent years, the Irish GDP has shot for reasons that have little in common with the country’s employees. This country surpassed Switzerland and Norway in GDPAt least, with regard to statistics. An unexpected state does not come from oil, but from the fiscal competence between the countries, the struggle in which Ireland managed to impose itself, based on a decrease in taxes. However, The money that enters Raudlya comes out almost as quickly for two reasons: One, because these advantages do not remain in Ireland. The other, because the taxes received by taxation of these benefits (through the corporate tax) were spent almost all. It is true that today Ireland has an important surplus for paying a fine that Brussels imposed on Apple (Apple must pay Ireland), but over all these years of the big income of Ireland, almost everything was spent, he barely saved the tenth.
Faced with countries that managed to create sovereign funds thanks to oil (for example, Norway), Ireland spent almost everything, and when it began to create these funds (four days ago), it did it very slowly. Now the threat of Donald Trump is hinting at the Irish economy, which may not lose its privileges and not end. During these years, The amounts of money that moved to Ireland were unusualGenerating large statistical distortions and helping to increase the government collection (Ireland, the collection of society almost weighs in the same way as in Spain IRPF in terms of GDP).
Large multinational corporations in this wet corner of Europe are an ideal place for registering their advantages obtained as a result of operations distributed around the world. Giants Technological, such as the rights to intellectual property Apple or Microsoft (Some of the most valuable assets on the planet) for Irish subsidiaries that use them to collect fees from jurisdictions with higher taxes. Pharmaceutical drugs do something similar, as well as They produce star medicines in IrelandAlthough they were developed by American companies. Through a network of licenses and licenses of accountants with the same imagination as James Joyce manages to distract the benefits to Ireland, where they pay 12.5%, one of the lowest types in the world, they explain from the economist.
This large translation of the benefit has three consequences for Ireland. One of them is that it distorts GDP to such an extent that the authorities use their own growth indicators. It makes no sense that GDP per capita of the population of Ireland is higher than that of Switzerland or Norway. It is enough to walk along some streets of Dublin or Cork to see that the Irish do not live even at the same level as the SwissNeither car, nor at home, nor consumption as a whole can be assimilated with the consumption of the richest countries (the richest true truths) on the continent. Another indicator that they use in Ireland, known as a modified lease, shows that Irish income is about 50,000 euros per capita, an important figure, but far from 85,000, which note per capita population. Most of the advantages that inflate the GDP of Ireland end with dividends or ransom of shares in the pockets of large investors and owners of companies living in the United States or in other countries.
Collection by societies
The more tangible is the tax on societies raised by these transnational corporations, which brings about 20,000 million euros per year (in the assembly, this is really beneficial in Ireland) and increases; This is not Saudi Arabia, but this is enough to pay schools and hospitals, according to Ireland. To this is added local employment created by these foreign firms, which make up 11% of the labor force and a third of the income tax. “The problem is that this“ trick ”could become too effective. In particular, in the United States there are reason to annoy: in addition to losing fiscal income, fictional export of products, such as Viagra (Designed in the United States, but sold to Americans from the crust) Artificially scribes the commercial deficit of goods with Ireland, the fourth largest in the country, after China, Mexico and Vietnam, ”they say from the British weekly.
This distortion made a traditional visit by the San Patricio Prime Minister of Ireland to the White House this year somewhat intense, and Donald Trump called the “stupid” appeal that the United States gave to Ireland, which is allegedly enriched at the expense of the United States. Ironically, his attempts to stop this fiscal competence or financial career during his first period, only contributed to its acceleration.
Europeans are not happy eitherTrump threatened in April by imposing “mutual” tariffs in April Based on the absurd formula that only considers the trade in the goods, the fact that Irish financial strategies are significantly distorted. If Ireland had not been an EU member, this formula would lead to 15% of tariffs instead of 20%.
For some in Brussels, the decision is clear: instead of punishing the entire EU, the United States should focus on the Irish financial system in order to reduce its commercial deficit. As expected, officials of the Irish Ministry of Finance prefer not to talk about this problem. Nevertheless, talking about pubs and statements in business offices indicate an official position: Ireland is not a financial paradise, because transnational corporations have a “real presence” in the country. According to Aidan Rigans, an economist and professor of University College Dublin, this is true, this is true, according to Aidan Rigan, an economist and professor of university college, which is taken into account in Ireland, much exceeds real local activities. ” Kevin Timoni from the financial company Davy claims that even without financial tricks Ireland will remain attractive to his qualified labor, access to the EU market and openness for foreign capital.
Dependence and big threat
This unexpected bonanza can be a sword with a double substance. In Dublin, they complain that the mass presence of employees of technological companies exacerbated the housing crisis. The Irish Advisory Council warned the risk that Ireland was suffering from “Dutch evil”, an economic imbalance similar to those who suffered from the Netherlands in the 70s, when his wealth in natural gas distorted his economy. Unlike oil, no one knows when this fiscal mana ends. Only three companies generated 38% of the total corporate tax fee in 2023.What leaves Ireland is extremely prone to the effectiveness of foreign companies at which it does not control.
It is also not known how Trump can act if he has changed financial rules or introduces new tariffs that harm Ireland. Ideally, the authorities reserved a fiscal excess in the sovereign fund, as Norway made with its oil in order to prepare for the possible end of the bonanza. But, according to O’Brien, from the Institute of International and European Affairs Dublin, Only the tenth of 160,000 million euros gathered in the last decade was saved (It is true that this year Ireland represents a huge excessBut this was not the norm). The combination of good luck and courage brought the benefits of Ireland. It only trusts that this success remains.