Friday, April 01, 2011

"Luck of the Irish" = Bad Luck

Ireland needs more bailout funding. Why? Because their growth over the last 15 years was built on a "lowest taxes" model and non-sustainable.

Ireland sought to attract business investment & clever individuals by undercutting competitors. Ireland's corporate tax rate is 12.5% (compared with 28% in the UK, 35%+ in the USA, 26% in Sweden). They reportedly (link) were also highly forgiving with corporate "administrative expense" allowances. The Irish boom drained resources from elsewhere, and they hoped to generate enough new value-added synergies to operate at low cost.   They failed.

Now they're saddled with thousands of deteriorating development projects. Indebtedness forces Dublin to beg competitors for assistance. Pity the Irish...?