The Celtic Tiger - his roar has been rarely heard in recent years, and most of Ireland believes this near-mythical beast to be extinct. But bear in mind that we are not talking about a real, flesh and blood, animal here. It only ever was a label, a nebulous concept, and the battle-cry of unbridled growth. Celtic Tiger (the Irish would be "An Tíogar Ceilteach", though rarely used) is a blanket term for the booming economy of (mainly) the Republic of Ireland in the years from 1995 to 2000. This was an unprecedented period of economic growth - mainly brought about through direct foreign investment and the migration of multinationals to Ireland as a low-cost base to serve the EMEA (Europe - Middle East - Africa) market.
One of the main reasons to invest in Ireland was not the official line of "highly educated young workforce" (many new businesses were showing an extremely high percentage of immigrants in the workforce), but the low corporation tax rate, tax and investment incentives, and the opportunity to engage in "creative accounting", thus maximising tax avoidance through a Byzantine (but legal) arrangement of companies interacting with one another.
How the Celtic Tiger was Born
During the boom years of the second half of the 1990s, the Irish economy expanded at an average rate of 9.4 % (between 1995 and 2000). After a number of catastrophic events (foot and mouth disease devastating Irish agriculture and tourism, the ripples from the 9/11 attacks, and subsequent international developments), the boom slumped in 2002, but generally continued with an average growth rate of 5.9 %. It should be noted that before the slump there was a period of real growth, mainly due to the export-oriented technology and pharmaceutical sectors.
After the slump, however, the Celtic Tiger started to feed on its accumulated fat: the so-called "bubble period" came, with (especially) property-price inflation yielding high levels of transaction-based tax revenue, triggering obviously unsustainable levels of artificially created "possible wealth" with growing debt - in short, a gigantic Ponzi scheme.
During this time, dramatic changes affected Irish society: Ireland before the Celtic Tiger was one of the poorest countries in Western Europe - only to become (almost over night) one of the wealthiest. With money to spare. Witness the rampant public spending (often on high-profile projects with no discernible need for them, while in parallel basic infrastructure like the health sector was neglected), annual tax reductions for all, and general lax financial restraint of the era. Household disposable income rose to unknown and unexpected record levels, leading to a humongous rise in consumer spending, with foreign holidays, lavish entertainment, luxury goods (Ireland having a higher per capita rate of privately owned helicopters than the USA at one time) and ...
property schemes. Around 2007 radio advertisements featured young couples planning to retire on the back of their multi-million property portfolio around the age of 45. A portfolio that was built through mortgages of 110 % ...
While the gap between highest and lowest income households widened, unemployment fell from 18 % (1980s) to 4.5 % (2007, even after a massive influx of immigrants from Eastern Europe). Average industrial wages grew, as well as inflation (5 % per annum). All this combined to push Irish prices up to and often beyond those of the notoriously expensive Nordic countries, at wage rates similar the UK.
The Death of a Feline
In 2008 the Celtic Tiger died, according to the government of the day suddenly and unexpected, according to less starry-eyed experts after a long and terminal illness ... along with the rest of the world, Ireland fell into recession. GDP contracted by 14 % and unemployment levels rose to 14 %, with emigration starting due to lack of prospects. Ireland was counted amongst the PIGS or PIIGS (the debt-ridden European states of Portugal, Ireland, Italy, Greece and Spain). And the bitter joke at the time was that the difference between Iceland and Ireland was "one letter and about three months"..
Only by receiving hefty assistance from outside sources could the state be kept afloat ...
At the end of 2013 Ireland regained financial autonomy to a large extend, but the Irish Budget for 2014 still was an austerity budget (with following budgets not really easing the load), and a successful reanimation of the Celtic Tiger is highly unlikely.
The Entitled Celtic Tiger Cubs
The generation born into this state of affairs (or at least reaching maturity at the time) is often referred to as the "Celtic Tiger Cubs". A blanket term for the generation of Irish born in the late 1980s and 1990s, that were raised in an unprecedented period of abundance. Which, in itself, is wrong - the gap between high earners and low earners widened considerably during the Celtic Tiger period, and those in disadvantaged circumstances did not find themselves so well off. Strictly speaking "Celtic Tiger Cubs" should only refer to those born into at least a "middle class" background, as defined by income more than anything else.
The Celtic Tiger Cubs are now seen as a "generation apart", maybe even a "lost generation". Having grown up with a strong sense of entitlement, many expected privileges, and worshipping rampant consumerism. Having had no (conscious) experience of "hard times" (a concept that only existed in stories from the older generations), they were hit by the economic downturn like a fawn by a speeding train.
A high number of Celtic Tiger Cubs also abandoned conventional career paths to make quick money without proper educational backgrounds - leading to a high number of unemployed with no marketable skills. On the other extreme, graduates with "junk degrees" abound. As the Celtic Tiger fades into Irish history, so will his cubs ...