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A Decade of Irish GDP Growth Built on Sand, not Bricks

Ireland, for a decade, was admired internationally for its above average rate of economic growth. Regarded as the “Celtic Tiger”, the domestic property market created enormous paper wealth for those who owned property and enormous cash wealth for those who were lucky enough to sell at the peak of the bubble before the market collapsed. I would suggest that growth was not real sustainable growth, it was speculative asset price inflation growth.

Below are two quotes in relation to Irish economy. One was released prior to the economic collapse in 2007, one after in 2009. 

2007: “Ireland has one of the strongest economies in the world.” – (The correct phrase would have been “Irish property prices are rising at one of the fastest rates globally”.

2009: “Irish-based financial institutions are benefiting massively from liquidity provided by the ECB. They are currently receiving EUR 130 billion in ECB loans, about 15% of the EUR 900 billion of ECB loans to the European banking sector. This is equivalent to 77 percent of Irish GDP.” - David O'Sullivan, Director General for Trade at the European Commission.

CB Loans equal to 77% of Irish Gross Domestic Product? No wonder the Irish appear to have voted in favour of the Lisbon Treaty. Don’t bite the hand that feeds you is one cliché that springs to mind.