With many pharmaceutical exports and as a location of tech companies, Ireland is one of the economic leaders in Europe. But the country is increasingly creating the dependency on the USA.
The Irish cloverleaf has three leaves – unmistakable as a national symbol. Economically, however, Ireland can expect a fourth lucky sheet, because the times of poverty are long gone. Ireland is now one of the richest states in Europe. “At the moment it is definitely a big draft horse, as far as exports are concerned with,” says Holger Görg, the foreign trade expert at the Kiel Institute for the World Economy (IFW).
Ireland is a very small, but also very open economy. This lives from import export and foreign direct investment. In addition, the population is very young – younger than in Germany – and also well trained, especially in the so -called MINT professions, i.e. in mathematics, computer science, natural sciences and technology.
In addition, the nation is in English, a clear plus on the international stage. The country has an average of more than five percent of growth rates, says Economist Thomas Obst from the Cologne Institute of German Economy (IW). “And you have a very high per capita income if you look at it in the EU comparison. In Ireland it is 100,000 euros per person. This is about twice as high as in the EU. In Germany for comparison, it is around 50,000 euros per person.”
Known for low Corporate taxes
Ireland’s success is mainly based on one factor: very low corporate taxes. Many multinational corporations from the tech and pharmaceutical industry have lured them to Ireland. Groups such as Meta, Google or Apple make high profits in Ireland. The country has made itself dangerously dependent on the United States in times of US President Trump’s trade dispute.
“Trump explained that he wants to bring the production back to the USA that he wanted to attract foreign direct investments. And that would of course be a danger for Ireland because the largest pharmaceutical manufacturers are American manufacturers,” says Thomas Obst from IW.
Focus on pharmacy
According to the federal foreign trade agency (GTAI), pharmaceutical products make up almost half of Ireland’s exports. According to Germany and Switzerland, Ireland is the third largest pharmaceutical exporter in the world. Many medications go to the USA.
Accordingly, Trump’s customs threats in particular threaten this industry. Medicines are still duty -free. The EU-USA-Zoll-Deal also play Ireland in the cards, says Holger Görg. “If you only look at the US trade deficit with Ireland, the tariffs for Ireland should actually be much higher – twice as high. There is already the impression in Ireland that you got away a bit of light.”
But Ireland’s future is becoming more difficult. The US tech corporations are a thorn in the side, Brussels wants to put pressure on Brussels with stricter regulations and taxes. There is no affordable living space in the country itself, especially in the big cities. In Dublin, a two room apartment often costs 2,600 euros. This is burdening the business location Ireland.
Nevertheless, Görg is convinced that Germany can learn from Ireland – with economic openness and when it comes to migration: “Ireland is a country that is traditionally very very open to migration, you can see it differently in Germany.”
Hold on to industry
And Ireland holds onto industry, while Germany discusses industrialization, says Thomas Obst: “What we can definitely learn is that a high proportion of industry in added value is very important. In Germany, too, we also have the debate on de-industrialization. We need competitive framework conditions. So Ireland is not only tax-friendly, they also have well-trained specialists there.”
Ireland is called “Celtic Tiger” because of its economic power. But in times of global trade conflicts and one -sided dependency, the question arises: How biting is this tiger?
