Table of Contents
3. Social Change
Especially in the late 20th century, Ireland has undergone substantial changes in its economy, politics (including education), and society, which can be described as an overall modernisation.
An important aspect in analysing this process is to examine how big the influence of the European Union, which Ireland joined in 1973 after its first application in 1961 , was and is. Is European integration a key aspect of Ireland’s rise to prosperity, or did national policy making play the main role? How important is the EU to Ireland’s development nowadays and what is to be expected in the future?12
Ireland’s most recent and main period of economic growth is referred to as the Celtic Tiger (1995-2007), and boosted the Gross Domestic Product (GDP) of a country that could have been described as underdeveloped in 1987 with a GDP per capita of 69% of the EU average . In 2007, Ireland’s GDP per person accounted for 148% of EU average, which made it the second strongest economy in the EU after Luxembourg.34
Looking back, one of the most important policies which enabled economic growth in the long run was the abolishment of protectionist policies in the late 1950s, in order to benefit from the “increasingly mobile and global nature of businesses ”5, thus, to attract Foreign Direct Investment (FDI). Nevertheless, the economy experienced another downturn between 1980 and 1987, shortly before the period of the Celtic Tiger6. In reaction to this decrease, the government established the Programme for National Recovery (PNR), which embodied an agreement on wage levels in the public and private sector, a reformation of the income tax system and an agreement of maintaining the value of social welfare payments in return for austerity measures in public spending. The programme was regarded as highly successful and its principle was carried through the 1990s in a number of other programmes (like the Programme for Social and Economic progress)78and is nowadays seen as the foundation for the social partnership movement, which provided labour stability through enhanced communication between social partners, such as trade unions, employers, and farmer organisations and the political leaders.
Further policies introduced by the Irish government and the Industrial Development Agency (IDA), such as a relatively low corporate tax rate (introduced at a rate of 10% in 1981 and increased to 12.5% in the mid-1990s), the offering of infrastructure and basic resources, the reduction of bureaucracy, and the providing of subsidies for the building of facilities, were added to create incentives for FDI beside the relatively young and English speaking workforce. Furthermore, Ireland, as a member of the European Economic Community (EEC), offered an easy access to markets with reduced tariffs particularly to American firms.
1Michelle Cini, European Union Politics, Second Edition, New York: Oxford University Press, 2007, p. 22
2Jim Dogge and Ruth Barrington, A Vital National Interest: Ireland in Europe 1973-1998, Dublin: IPA, 1999, p.4
3<http://www.economist.com/node/3261047>, Lastaccessed: 25/04/2012
4http://irland.um.dk/en/the-trade-council/ireland-as-a-market/; Last accessed: 25/04/2012
5Brendan Bartley and Rob Kitchin, Understanding Contemporary Ireland, London: Pluto Press, 2007, p. 5
6Colum Kenny, Moments that Changed Us, Dublin: Gill & Macmillan, 2005, p. 175
7Colum Kenny, Moments that Changed Us, Dublin: Gill & Macmillan, 2005, p. 175-176
8Brendan Bartley and Rob Kitchin, Understanding Contemporary Ireland, London: Pluto Press, 2007, p. 4-5