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Ireland ... How Did They Go From "3Rd World To Industrial"?

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r4 this morning discussing ireland. One of the presenters said ireland went from 3rd world agricultural poverty to being an industrial nation (and if it wasn't for that pesky house price inflation they'd have been fine...)

So what steps did they take to bring industry to their shores ............ or did he actually mean "they build a lot of houses"

He had a romanian taxi driver drive him to a ghost village ...

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r4 this morning discussing ireland. One of the presenters said ireland went from 3rd world agricultural poverty to being an industrial nation (and if it wasn't for that pesky house price inflation they'd have been fine...)

So what steps did they take to bring industry to their shores ............ or did he actually mean "they build a lot of houses"

He had a romanian taxi driver drive him to a ghost village ...

4-5 years ago I remember hearing that Ireland was at that time the number one country for offshore outsourcing, (bigger than India at the time), it seems the low Corporation tax which is causing some comment at the moment was used to lure big, particularly American companies, to site call centres and the like there, English speaking and in Europe, perfect location from multinationals point of view.

I know whenever I've worked with companies ordering large numbers of computers (1000+) people like Dell always seem to be shipping from Ireland.

Edited by madpenguin

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r4 this morning discussing ireland. One of the presenters said ireland went from 3rd world agricultural poverty to being an industrial nation (and if it wasn't for that pesky house price inflation they'd have been fine...)

So what steps did they take to bring industry to their shores ............ or did he actually mean "they build a lot of houses"

He had a romanian taxi driver drive him to a ghost village ...

Huge payments from the EU, allowed them to drop their tax rates, which encouraged big multi-nationals to set up in Ireland and use the country as a tax haven.

This was good.

Then a bunch of crooks took over the banks and the government, and exercised a classic control fraud over the Irish economy, with the banks racking up masses of liabilities and apparent assets onto their balance sheets.

When the tide went out, they were swimming naked, and the banks collapsed, billions having been defrauded. The crooks in the Irish government covered up the bank frauds by assuming the worst liabilities of those banks.

The Irish economy does have a lot of good and useful exporting industries, though they are there thanks to the largesse of the EU taxpayer. I dont know if that taxpayer, which includes the UK, will be quite so generous in the future.

Edited by leicestersq

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Well, one major factor was they became EU base for lots of big and high-value 'merkin companies.

Makes a lot of sense for the 'merkins. English-speaking, business-friendly, and EU-friendly. The downside - it became the story that drove HPI there - their equivalent of our "small island, big demand".

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Huge payments from the EU, allowed them to drop their tax rates, which encouraged big multi-nationals to set up in Ireland and use the country as a tax haven.

This was good.

Then a bunch of crooks took over the banks and the government, and exercised a classic control fraud over the Irish economy, with the banks racking up masses of liabilities and apparent assets onto their balance sheets.

When the tide went out, they were swimming naked, and the banks collapsed, billions having been defrauded. The crooks in the Irish government covered up the bank frauds by assuming the worst liabilities of those banks.

The Irish economy does have a lot of good and useful exporting industries, though they are there thanks to the largesse of the EU taxpayer. I dont know if that taxpayer, which includes the UK, will be quite so generous in the future.

practice for the China experiment?

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Dunno about the others but Google being based there is about tax arbitrage...

Google Ireland licenses technology to Google UK, the funds are the channeled through Holland back to the US and in the end Google only pays about 1.4% tax on its UK profits.

There was an article about it in on of the US business sites recently.

Andy

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Even when Ireland was agricultural, it's education system was seen to be one of the best in Europe. It's problem was that it had no industry for the kids to work in, so most of them left. The EU, the EU money, low taxes and English speaking meant that loads of high skilled industry moved there and they kept hold of a generation of their youth.

I think it's true, if it wasn't for the greed they could have made it. Those companies that moved there were very easy to move on.

Even before the crash, the high house prices meant the workers had overpriced themselves.

What now. No industry, no money to educate their kids. What's happening with the CAP?

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Ireland has an excellent education system and a young demographic. Multinationals set up there because of the low corporation tax and skilled workers. Their boom in the 90s was laregely down to a genuine improvement in the country's output spread over a number of modern industries, not just building. After 1999 and the Euro, when their interest rates were halved overnight, the boom became your common or garden (but enormous) property boom. What's interesting is that much of the money pouring into the country came from German banks who used Ireland's liberalised (or ineffectually regulated) banking system to get up to some seriously dodgy dealings that they wouldn't have been able to get up to in Frankfurt. Now the German government is running the show there to try and protect its own banks. Obviously French and UK banks are heavily implicated too. I feel sorry for the Irish - they've been let down by an incompetent and greedy 'elite' - namely the political and banking class have completely sunk the country and squandered the progress they made in the 80s and 90s, innit?

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Well, one major factor was they became EU base for lots of big and high-value 'merkin companies.

Makes a lot of sense for the 'merkins. English-speaking, business-friendly, and EU-friendly. The downside - it became the story that drove HPI there - their equivalent of our "small island, big demand".

Lots of them are leaving now. Dell has already left for Poland for instance. Ireland is far to expensive.

Main reason for Ireland's growth was the massive EU payments over 30 years or so. Something like 35billion euro's (at then present prices, in today's money its probably 100 Billion++), about 4% of GDP per year.

Basically its enough to give a house to every man, woman and child in Ireland.

http://www.finfacts.ie/comment/irelandeunetreceiptsbenefits.htm

Of course the Irish are probably enraged that they are having to pay into the EU now...

Edited by Peter Hun

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There's not much money in operating a tax haven for someone the size of Ireland, Bermuda can get away with it being about 20 square miles and 65K people. Ireland not so much.

Cash flow looks fantastic and Lexapro could do well there but really undercutting everyone else doesn't make you many friends.

http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

Microsoft, based in Redmond, Washington, has also used a Double Irish structure, according to company filings overseas. Forest Laboratories Inc., maker of the antidepressant Lexapro, does as well, Bloomberg News reported in May. The New York-based drug manufacturer claims that most of its profits are earned overseas even though its sales are almost entirely in the U.S. Forest later disclosed that its transfer pricing was being audited by the IRS.

Since the 1960s, Ireland has pursued a strategy of offering tax incentives to attract multinationals. A lesser-appreciated aspect of Ireland’s appeal is that it allows companies to shift income out of the country with minimal tax consequences, said Jim Stewart, a senior lecturer in finance at Trinity College’s school of business in Dublin.

Getting Profits Out

“You accumulate profits within Ireland, but then you get them out of the country relatively easily,” Stewart said. “And you do it by using Bermuda.”

Eoin Dorgan, a spokesman for the Irish Department of Finance, declined to comment on Google’s strategies specifically. “Ireland always seeks to ensure that the profits charged in Ireland fully reflect the functions, assets and risks located here by multinational groups,” he said.

Once Google’s non-U.S. profits hit Bermuda, they become difficult to track. The subsidiary managed there changed its legal form of organization in 2006 to become a so-called unlimited liability company. Under Irish rules, that means it’s not required to disclose such financial information as income statements or balance sheets.

Today

http://www.guardian.co.uk/business/2010/nov/15/ireland-corporate-tax-eu-bailout

While Ireland is fiercely fending off any rescue package, there is speculation that a rise in corporation tax could be demanded by countries such as Germany which fear they are losing business because of the country's low tax regime. Germany's equivalent rate is 29.41%, according to data compiled by KPMG.

Elmar Brok, German Christian Democrat (CDU) member of the European parliament, told Reuters: "Ireland has two options to consolidate its budget – cut expenses even further or increase taxes like the corporate tax rate."

Olli Rehn, the European commissioner for economic and monetary affairs, has also set his sights on the country's tax regime, saying last week that it was "difficult to imagine Ireland remaining a low-taxation country" if a bailout occurred.

Edited by northwestsmith2

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4-5 years ago I remember hearing that Ireland was at that time the number one country for offshore outsourcing, (bigger than India at the time), it seems the low Corporation tax which is causing some comment at the moment was used to lure big, particularly American companies, to site call centres and the like there, English speaking and in Europe, perfect location from multinationals point of view.

I know whenever I've worked with companies ordering large numbers of computers (1000+) people like Dell always seem to be shipping from Ireland.

I worked out in California with some guys from Eire in one of the US tech companies I worked at. I tend to really like the Irish asup until then I had never met a nasty one but these guys - one in particular - hated the British and it was nigh on impossible for him to hide his feelings.

He had this grand plan, it seemed, of rising up the corporate ladder in the US whilst buying up property back in Eire so that he could rellocate there as the head of this firm's EMEA operation. I have no idea whether he did this or not in the end but that was his plan.

Anyhow, Eire boomed for the reasons you mentioned - low corporate tax, cheap work-force, english spoken and loads of EU OB1 money.

I think Dell have gone to Poland now? Not sure about the other tech companies. I used to get loads of calls for jobs with Intel and Google in Dublin.

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I think Dell have gone to Poland now? Not sure about the other tech companies. I used to get loads of calls for jobs with Intel and Google in Dublin.

Yeah me too, had a couple of interviews in Dublin, nice city but bloody expensive

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Yeah me too, had a couple of interviews in Dublin, nice city but bloody expensive

Yes, only thing that put me off to be honest. Closer to me than London, easier to get to, Celts and not Mockneys and a real, fun, happy place to work and live in... but the costs of living there a few years back put even London into the shade.

Paid a fortune from the airport to the town and back a few times. I remember a taxi driver telling me how her Mum's two up two down Dublin terrace had sold for half a million Euros.

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Yes, only thing that put me off to be honest. Closer to me than London, easier to get to, Celts and not Mockneys and a real, fun, happy place to work and live in... but the costs of living there a few years back put even London into the shade.

Paid a fortune from the airport to the town and back a few times. I remember a taxi driver telling me how her Mum's two up two down Dublin terrace had sold for half a million Euros.

I heard some of it this morning too. What caught my attention was that a fella had paid €400,000 on a 100% mortgage for a house over 38 years. :blink: Madness.

Edited by deflation

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Google, Microsoft, Dell and even Facebook are based there. I'm sure its not for the weather.

Dell made massive profits last year in Ireland (about 28 million euro) but still moved their manufacturing plant from Limerick to Poland: grant aided by EU

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Ireland has an excellent education system and a young demographic. Multinationals set up there because of the low corporation tax and skilled workers. Their boom in the 90s was laregely down to a genuine improvement in the country's output spread over a number of modern industries, not just building. After 1999 and the Euro, when their interest rates were halved overnight, the boom became your common or garden (but enormous) property boom. What's interesting is that much of the money pouring into the country came from German banks who used Ireland's liberalised (or ineffectually regulated) banking system to get up to some seriously dodgy dealings that they wouldn't have been able to get up to in Frankfurt. Now the German government is running the show there to try and protect its own banks. Obviously French and UK banks are heavily implicated too. I feel sorry for the Irish - they've been let down by an incompetent and greedy 'elite' - namely the political and banking class have completely sunk the country and squandered the progress they made in the 80s and 90s, innit?

Spot on Gimble. Perfect analysis of how the Irish were conned. Glad to see a well written account of Ireland's downfall, unlike some of the simplistic paddywhackery that some correspondents engage in. A combination of domestic and international factors contrived to con a huge amount of Irish people. The onus is now on the Irish to refoem their political system to dispose of the moronic parish pump clientelist politicians that they contantly elect. We also need to realise the pernicious role that the EU globalists have played in Ireland's crisis.

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Ahh the halcyon days of 2006 - when no one could possibly have seen it coming!

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article733821.ece

My favourite part is the last paragraph:

The new global economy poses real long-term challenges to Britain, but also real opportunities for us to prosper and succeed. In Ireland they understand this. They have freed their markets, developed the skills of their workforce, encouraged enterprise and innovation and created a dynamic economy. They have much to teach us, if only we are willing to learn.

I am inspired. Thanks George. :blink:

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Even when Ireland was agricultural, it's education system was seen to be one of the best in Europe. It's problem was that it had no industry for the kids to work in, so most of them left. The EU, the EU money, low taxes and English speaking meant that loads of high skilled industry moved there and they kept hold of a generation of their youth.

I think it's true, if it wasn't for the greed they could have made it. Those companies that moved there were very easy to move on.

Even before the crash, the high house prices meant the workers had overpriced themselves.

What now. No industry, no money to educate their kids. What's happening with the CAP?

Things were going pretty well until around 2000/2001. Because of what was originally a low cost, well educated, English-speaking nation in the EU there was plenty of foreign investment in the mid to late 90s which stimulated genuine economic growth.

As the economy improved, house prices rocketed and standards of living also improved. Then around 2000/2001 there was a tipping point and the economy became more about property speculation and making 'money for nothing' than production and export.

Banks were lending money to anyone who could fog a glass and the rising cost of living (not helped with the Euro introduction) meant that wages had to rise sharply to keep pace, turning Ireland from a low cost base into a high cost one. Also, having the Euro meant low interest rates which the state was most certainly not accustomed to. Too low in fact, but since Germany needed low rates that is what Ireland got along with the mother of all property bubbles. The population were frantically scrambling around to 'get rich quick' by buying property, fearful they would be left behind. People queued for days to buy houses on new developments, 'savvy investors' were buying into property abroad where it was 'cheap' (for good reason......).

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A: Unsustainable credit boom. It's the same answer to "How has Britain remained a first world nation (assuming that you think it still is)?"

Globalisation has changed the game, but so few people seem willing to accept it. The west will be in decline for decades to come - the important thing is how we manage that decline. The current "prop it all up and hope for the best" thinking isn't working, and will fail.

Britain and Ireland had temporary benefits from globalisation, but they were only ever going to be temporary benefits - and I'm afraid it's all downhill from here.

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I'm getting more and more wary of the media/politicians lauding countries experiencing "economic miracles" as time goes on.

We had Japan in the Thatcher years held up as an example of how to run a thriving economy, and more recently we've had "tiger economies" like Ireland, but it always seems their "miracles" are built on land/property inflation every time. <_<

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Ahh the halcyon days of 2006 - when no one could possibly have seen it coming!

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article733821.ece

My favourite part is the last paragraph:

I am inspired. Thanks George. :blink:

I prefer -

"Ireland is no longer on the edge of Europe but is instead an Atlantic bridge. High-tech companies such as Intel, Oracle and Apple have chosen to base their European operations there. I will be asking Google executives today why they set up in Dublin, not London. It is the kind of question I wish the Chancellor of the Exchequer was asking."

I wonder what reply Mr Osbourne got?

Edited by alexw

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I'm getting more and more wary of the media/politicians lauding countries experiencing "economic miracles" as time goes on.

We had Japan in the Thatcher years held up as an example of how to run a thriving economy, and more recently we've had "tiger economies" like Ireland, but it always seems their "miracles" are built on land/property inflation every time. <_<

I wonder if China's economic miracle is bogus too...

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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