PREPARATORY WORK

Laure Mace Double degree DUCTI/L3 LEA Dunkerque The Institute of Technology, Carlow Assignment date: 1 st December 2010

While EU leaders were coming to the aid of Greece, and the markets were in shock about the deterioration of the debt rating of Portugal. During this time, Ireland has fallen; its economic situation in a critical state. Once known as the “Celtic Tiger”, for its record of economic growth, Ireland is now in the middle of a financial tsunami. In many ways, Ireland seems to be a microcosm of the United States, with the only difference, the Gaelic accent. Some figures illustrate this unprecedented crisis: The Irish deficit broke all records in the euro area (32% of GDP this year, France is around 8%) Unemployment rises to 13% of the workforce The banking system continued to exist thanks to the rescue of the Irish State The borrowing rates offered by banks in Ireland are overpriced

So why has the “Irish miracle” sudddenly collapsed? "We must not forget that 20 years ago, Ireland was the EU's poorest country," said economics professor Olivier Pastre France Info. The country has applied a very liberal policy. The Irish have the lowest coporate tax in Europe, at 12.5%. It created very strong growth, with multinationals attracted by the young educated workforce. Thanks to their liberal tax policy, they have attracted many companies especially Americans, which have moved their operations overseas when the crisis came. The strength of Ireland’s economy during its glory years was largely based on the success of the globalization economic model. (Implantation of International businesses, particularly high-tech companies). The United States pretends that the economic collapse underway in Ireland is irrelevant to its own situation; In fact it’s these same elements which threaten the American economy. 
 Reasons for the “sudden collapse” How did Ireland get there? First, the country's economy depended heavily on financial activities and