Economic development in the Republic of Ireland peaked in the early 1990’s. For centuries Ireland was mainly tied to the success of its agricultural production, but the computer age brought the long-desired economic boom, albeit with some delay. Celtic Tiger is what market researchers call this phenomenon, which began with the settlement of well-known software manufacturers on the island and lasted until around 2007 despite some economic fluctuations, especially after September 11, 2001. The global financial and economic crisis has hit Ireland particularly hard since 2008 because its prosperity was very much based on property speculation.
Ireland’s way out of the economic shadowy existence
As a former British colony, Ireland’s economic and political position has been shaped for centuries by its relationship with its neighboring British island. In order to understand the economic boom in Ireland at the end of the 20th and the beginning of the 21st century, it is necessary to take a quick look at the past of relations between England and Ireland.
The geographical proximity of Ireland and its political ties to England made the Irish market dependent not only on the needs but also on the political goodwill of its stronger neighbor for centuries. As a colony, during the British Empire, Ireland’s economy was largely determined by trade with England. So it shouldn’t come as a surprise that until the founding of the Irish Free State in 1921, economic sanctions were England’s most frequently used political leverage against the small rebellious colony on its own doorstep.
From 1921 to 1949, the year the Republic of Ireland (Éire)was founded, British resistance to the gradually advancing independence of Ireland expressed itself through import / export restrictions and excessive tariffs, which incidentally were replied by the Irish government with the same conditions (Irish-British Customs and Economic War 1932-1938). If the economic relations between two countries are to a large extent an expression of their political relations, the Irish-British trade treaty of 1936 can be seen as a signpost for England’s goodwill towards the independence of Southern Ireland.
And nowadays the good economic relations between Northern and Southern Ireland as well as Great Britain contribute significantly to the political stabilization in the crisis-ridden province.
Ireland is going European
As a newly established republic, Ireland struggled to break out of the shadow of mighty Great Britain. It may come as a surprise that Ireland’s economic endeavors were increasingly oriented towards the European continent only after 1949. But the complex web of historical events up to the middle of the 20th century, the international alliances that emerged after the end of the Second World War, as well as the centuries-old existence as a British colony only now made looking over England’s shoulder a concrete opportunity for an economic upswing.
Entry into the European community of states in 1973 (then EC, now European Union) was the beginning of a new political and economic era for Ireland. Ireland now did this as an independent state; for the first time in its history, the country was given the opportunity to move on the international stage and at the same time make use of the available EU funds. The financial support that Ireland now received from Brussels thus contributed significantly to an improvement in the economic situation in what was then the poorest country in Europe.
First of all, domestic production was boosted, the infrastructure improved and expanded, and on a social level, the money from the EU’s pots was channeled into housing and training plugged. Even if it would take another twenty years for Ireland to fully enjoy economic growth, its integration into the EU (followed later by accession to the European monetary union, which Great Britain has not yet completed) meant the decisive turning point for economic growth Conditions in Ireland.
Many Irish people today are critical of the policies of the European Union. The Lisbon Treaty, which has now been ratified, was rejected in the first referendum on June 12, 2008. Only after massive pressure from the European Commission and simultaneous concessions to Ireland was the new EU constitutional treaty approved by the people in the second referendum (October 2, 2009).
The Celtic Tiger: The Origin
Ireland is quite a small country compared to other European countries with a small population of just under 4 million today. Until the 1980’s, emigration, particularly to the United States, was a common response to that, often accompanied by economic disaster (the largest of which was the 1845-1849 famine in The Great Famine, in which millions of Irish people lost their lives) bad conditions in their own country. Ireland has no special raw material deposits and was therefore, apart from a few industrial locations especially in the east coast, always quite dependent on agriculture and England as a sales market for its products.