Friedrich-Schiller-University, Jena

"The Celtic Tiger"
this powerful "animal" also bare it´s teeth

by

 Miriam Rinke

Content

Abbreviations 2

Introduction 3

Definition of the "Celtic Tiger" 3

What makes the Celtic Tiger run? - Causes of the boom 4

Tax rates and Foreign Direct Investments 4
Membership of the EU, structural funds and workforce 6
Social Partnership 7

The effects of the Celtic Tiger - the animal also unsheathe it´s hurting claws 9

Unemployment, poverty and living conditions 9
Property market and inflation 11
Ireland, US investors, competitors and the EU 12
Strikes, working conditions and civil commodation 14

Conclusion 15

List of literature 16

Introduction

The globalisation of the world economy is one of the most important business and economic phenomenon at the close of the 20 th century. The process has been driven by a wide range of forces such as improvements in transport and communications and, most importantly, the clear demonstration that openess to the international economy offers a route to economic development while isolatio offers stagnation and decline. Ireland has also participated enthusiastically in this process through the development of a modern trading industrial base.

The last years of the twentieth century have added an exceptional dimension to the transition to a new millennium in Ireland. The economy of the Republic of Ireland has undergone a singular transformation; it has surmounted crippling weaknesses to attract widespread recog-nition for its impressive performance. No part of the island and no individual on it has been wholly insulated from the effects of this turnaround.

Within the scope of our group presentation I´ve get very interested in this phenomenon of the so called "Celtic Tiger". In this termpaper I will try to explain what the "Celtic Tiger" is and what makes him run. I will also try to describe its effects. Although the Celic Tiger has led to an enormous growth, there is another side of the coin. Not every member of the Irish Republic has profited by the changes in the country. There aren´t only winners. It´s my aim to show the different sides of this economic boom of Ireland. I will analyse the advantages and highlights but also the downside of the Celtic Tiger and at the end of the paper the main points will be summarized in my conclusion.

Definition of the "Celtic Tiger"

The term "tiger economy" has been used for about fifteen years to describe the more successful small Asian economies. The original tiger economies were the Four Tigers of Hong Kong, Singapore, Taiwan and South Korea, which have been joined more recently by others that include the Philippines, Thailand and Malaysia.
The "Celtic Tiger" is the Republic of Ireland, which has benefited from a lot of different positive effects which will be described in the second chapter. As a result, Ireland claims to have been the fastest-growing economy in Europe over the past decade, admittedly from a low base. The term is mostly confined to British and Irish business and financial circles, and must be classed as jargon.

What makes the Celtic Tiger run? - Causes of the boom

Although it isn´t really easy to analyse the different reasons of the boom, in this chapter I will try to answer the question “where did this boom come from?”.
In literature there is a little agreement on this question, there is even confusion about how big the boom is. The factors that are sited as the cause of the Celtic Tiger seem to depend more on the political outlook of who is talking than on any objective analysis. In spite of these difficulties in revealing the main causes, I was able to recover principal reasons that lead to this enormous growth of Ireland´s economy. These causes are mentioned in the following passages.

Tax rates and Foreign Direct Investments

For illustrating and explaining the first two important reasons of the boom, I´ve chosen the graph below:

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