This graph illustrates Ireland’s best hope for recovering from its current crisis.

The Celtic Tiger boomed in the 1990s with economic liberalisation.  It rose in the economic freedom index of the Heritage Foundation and the Wall Street Journal to rank as the freest economy after Hong Kong and Singapore.  Notions that its economic success was due to EU subsidies and interventionist industry policies were misplaced.

Policy errors combined with the unsuitability of EU monetary policy for an overheating economy contributed to the property bubble, bank failures and the debt crisis of recent years.  However, Ireland stands a better chance of recovery than some other highly indebted European economies.

Internal devaluation is already working, export growth is strong, and the government has taken tough decisions, including cuts of 10 percent to public sector payrolls.

The biggest risk remains the possible need for further recapitalisation of Ireland’s banks and associated sovereign debt burdens.

The challenge for Ireland is to return to the principles of the Celtic Tiger and achieve growth rates in the next few years that will see its debt levels peak and reverse.

Ireland’s tigerish dynamics – liberalised, young, productive and hi-tech!

Click on the graph to enlarge.

Source: OECD, Eurostat, CBI, Datastream


  1. Yeah right. If that was all it took, how come German’s economy (highly regulated in both axes) is currently leading the world?

    And Ireland Celtic Tiger policies (free university education for all, for example) puts NZ interest free student loans wildly in the shade!

    And now I think about it – how the FUCK can Ireland be “lightly regulated”? It’s right in the EU – it has every single EU regulation to obey.
    So there’s something very odd about your graph.

  2. It seems to me the banks worldwide are, and have been behaving recklessly, and then not taking ownership but getting bailed out by taxpayers (the crazy lending to the Irish boom is a classic – how many hundreds of thousands of empty houses?!) and strangling the productive sectors of the economy. I would say that the rise of the financial sector (in all its facets) in the last few decades is a concern as large parts of it are generally unproductive.

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