The Celtic Tiger – Its roar has rarely been heard in recent years, and most of Ireland believe this near-mythical beast is extinct. But keep in mind that we are not talking about a real, flesh and blood animal here. It was just a label, a nebulous concept, and the rallying cry of growth. The Celtic tiger (the Irish would be » An Tíogar Ceilteach «, although it is rarely used) is a general term for the burgeoning economy of (mainly) the Republic of Ireland in the years 1995 to 2000. This was a period of economic growth without precedents. mainly through foreign direct investment and multinational migration to Ireland as a low cost base to serve the EMEA (Europe – Middle East – Africa) market.
One of the main reasons for investing in Ireland was not the official ‘highly educated young workforce’ line (many startups showed an extremely high percentage of immigrants in the workforce), but the low corporate tax rate, investment and tax incentives, and the opportunity to engage in ‘creative accounting’, thus maximizing tax evasion through a Byzantine (but legal) arrangement of interacting companies.
How the Celtic tiger was born
During the boom years of the second half of the 1990s, the Irish economy expanded at an average rate of 9.4% (between 1995 and 2000). After a series of catastrophic events (foot and mouth disease devastating Irish agriculture and tourism, ripples from the September 11 attacks, and subsequent international developments), the boom subsided in 2002, but overall continued at a rate of 5.9% average growth. It should be noted that before the crash there was a period of real growth, mainly due to the export-oriented technology and pharmaceutical sectors.
However, after the fall, the Celtic Tiger began to feed on its accumulated fat: the so-called ‘bubble period’ arrived, with (especially) property price inflation producing high levels of tax revenue based on transactions, resulting in obviously unsustainable levels of artificially created “potential wealth” with mounting debt – in short, a gigantic Ponzi scheme.
During this time, dramatic changes affected Irish society: Ireland before the Celtic Tiger was one of the poorest countries in Western Europe, only to become (almost overnight) one of the richest. With money to spare. Witness rampant public spending (often on high-profile projects with no discernible need for them, while in parallel basic infrastructure such as the healthcare sector was neglected), annual tax cuts for all, and moderate overall financial tightening of The time. Household disposable income rose to unknown and unexpected record levels, leading to a huge increase in consumer spending, with vacations abroad, lavish entertainment, luxury goods (Ireland had a per capita rate of helicopter owned higher than the United States at one point) and. ..
property schemes. Around 2007, radio ads showed young couples planning to retire on the back of their portfolio of multi-million dollar properties around the age of 45. A portfolio that was built through 110% mortgages …
While the gap between the highest and lowest income households widened, unemployment fell from 18% (1980) to 4.5% (2007, even after a massive influx of immigrants from Eastern Europe). Average industrial wages grew, as did inflation (5% per year ). All of this combined to push Irish prices up to and often beyond those of the notoriously expensive Nordic countries, at similar wage rates to the UK.
The death of a feline
In 2008, the Celtic Tiger died, according to the government of the time, suddenly and unexpectedly, according to experts with less starry eyes after a long and terminal illness … together with the rest of the world, Ireland fell into recession. GDP contracted 14% and unemployment levels rose to 14%, and emigration began due to the lack of prospects. Ireland was counted among the PIGS or PIIGS (the indebted European states of Portugal, Ireland, Italy, Greece and Spain). And the bitter joke of the time was that the difference between Iceland and Ireland was “one letter and about three months.”
Only by receiving considerable assistance from outside sources could the state keep afloat …
In late 2013, Ireland regained financial autonomy to a large extent, but the Irish Budget for 2014 was still an austerity budget (with the following budgets not really easing the burden), and a successful revival of the Celtic Tiger is highly unlikely. .
The titled Celtic tiger cubs
The generation born into this state of affairs (or at least reaching maturity at the time) are often referred to as the “Celtic Tiger Cubs.” A blanket term for the generation of Irish born in the late 1980s and 1990s, who were raised in a period of unprecedented abundance. Which, in itself, is wrong: The gap between high-earners and low-earners widened considerably during the Celtic Tiger period, and those in disadvantaged circumstances didn’t fare so well. Strictly speaking, “Celtic tiger cubs” should only refer to those born to at least a “middle class” background, as defined by income more than anything else.
The Celtic Tiger Cubs are now seen as a “generation apart”, perhaps even a “lost generation.” Having grown up with a strong sense of entitlement, many expected privileges, and adoring unbridled consumerism. Having had no (conscious) experience of “hard times” (a concept that only existed in the stories of previous generations), they were hit by the economic downturn like a fawn by a moving train.
Large numbers of Celtic tiger cubs also abandoned conventional career paths to earn quick money without proper educational backgrounds, leading to large numbers of unemployed with no marketable skills. At the other extreme, graduates with “junk degrees” abound. As the Celtic tiger fades into Irish history, so will its cubs …
