Ireland's unique problem of oversurplus

As we continue to witness and experience various shifts in the economy, many factors come into play that lead to global problems. These include climate change, natural disasters and country debt. However, Ireland is facing a rather unusual problem; they have more money than expected this year.

It is stated that Ireland has over €8 billion in surplus, with an additional €14.1 billion coming from Apple. But before dissecting this news, we must first understand the leading factors of Ireland’s economy and how they have influenced other countries and companies worldwide.

Ireland had a brief period when its economy was rising rapidly, known as the Celtic Tiger era, from 1995 - 2007. It was the beginning of a new opportunity for the government to attract businesses as various big U.S. companies such as Intel and Dell built their facilities to gain some of the significant benefits companies seek from the government, making Ireland one of the wealthiest countries in a short period. However, that era disappeared due to the eventual restricted amount of foreign capital and export demands. The global recession followed this up as it increased unemployment and high debts.

Now, the country is predicted to gain €65.2 billion in budget surplus by 2027. With this rapid growth, we are recently witnessing the continuous growth they experienced once again. But there are important reasons why companies come as they have in the past. One of the big ones is that the country offers a significantly low corporate tax rate at 12.5% compared to anywhere in the world. However, even as the business operation continues, it is widely known that doing it in Ireland is the best method, as the country has access to the European Union when companies want to enter the European market.

Along with this growth comes Apple’s news. The company owes €14.4 billion in back taxes to Ireland primarily due to their corporate taxes they did not pay for from 2004 - 2014. It was initially in the discussion from the European Union members that Apple does not need to repay the back taxes and interests for the longest time. However, they recently decided that it was illegal for state aid to be given to Apple. With the money being transferred to Ireland, the government plans to put most of it into the country’s sovereign wealth funds and their Treasury-managed venture. The opportunities given to companies in the country are incredible for many. However, we need to see the other side of the country from the residents’ perspective. 

The housing crisis has been one of Ireland’s most prominent problems and has been headlining the country for a while. Despite having a population of over 5 million people, Ireland’s central bank has stated that the government will need to build roughly 20,000 more homes yearly to meet their demand as more people are coming in. The increase in the property rate is also affecting the situation, with Ireland investing the lowest in housing out of the 14 EU countries. With the economy’s ever-increasing inflation, Ireland will need to find a method to tackle this problem for the people.