Daily Management Review

Irish vs Finnish Economies: Why Celtic Tiger Won


04/01/2016


Why Ireland and Finland are on opposite sides of the euro-zone growth? Because one of them found a way out of economic difficulties. The other, on the contrary, has become a "new patient in Europe", although there was a time when the country featured an "economic miracle."



ReflectedSerendipity via flickr
ReflectedSerendipity via flickr
Despite the fact that both countries are constrained by the single currency, the level of performance in after-crisis Ireland and Finland is very much different.

After increase at a stunning 7.8% in 2015, the "Celtic Tiger", according to forecasts, intends to grow at accelerated pace in the euro area this year, showing an increase of 4,7%, Bloomberg economists report. It is worth noting that the influx of multinational companies in the country slightly distorts data on GDP of Ireland; the country is also showing employment growth of 3% per year.

Finland, by contrast, continues to disappoint regulators. After 2012, its GDP will increase by only 0.5% this year, what is the lowest after Greece. Unemployment, meanwhile, peaked at 9.4% last year.

Finland’s all the troubles and misfortunes are regularly attributed to Nokia’s collapse and paper industry’s attempts to stay afloat. Standard & Poor 's deprived the Nordic country of "AAA" rating, while improving Ireland from the lowest level since 2012 to "BBB +".

Finnish euro critics believe that things in the country will go smoothly once exports increase at the expense of currency devaluation is be allowed. The Irish experience shows that the crucial question is not what you're selling, but, most importantly, where. While Ireland expects to increase exports of computer equipment and pharmaceutical products in the United States, Finland is struggling, as the country’s one of the major export markets, Russia, is mired in a recession.

Ireland, unlike Finland, adopted tax code to convince large multinational corporations, such as Facebook, Apple, Google, Pfizer, to establish their branches in the country. The corporate tax rate in Finland is at a level of 20%, while it is 12.5% - the lowest in the euro area - in Ireland. Foreign investments in Finland decreased in 2013, as Finnish companies have invested abroad rather than domestically.

The authorities argue that the lack of competition also affects the increase in unemployment, which reached 9.4% last year. In 2012, for example, it was at 7.7%. The government has decided to reduce the cost of maintaining the workforce in the country.

Still, the Scandinavian country is also still one of the most competitive countries in the world, although Ireland wins when it comes to the efficiency of the labor market.

source: chicagotribune.com






Science & Technology

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

Verizon to introduce 5G in five American cities in 2018

Airbus, Rolls-Royce, Siemens to create an electric aircraft

Study Finds Treatment Efficacy Could Be Sacrificed For Reduced Side Effects In Cancer Therapies By Patients

Some Information About Their Self-Driving Car Research Has Been Disclosed By Apple Scientists For The First Time

A Massive Data Breach Was Covered Up By Uber By Paying Up Hackers

A City Is Can Be Converted To A Living Organism, Showcases China’s Huawei

Workers Would Be Helped To Lift More By These Robotic Vests

World Politics

World & Politics

Phase Two Of Brexit Talks, Announced On Friday, Would Be Tough, Analysts Say

Elections in Italy: the last chance of Eurosceptics?

15 countries with the highest level of organized crime

Athens agreed with international lenders

EU Pressure Reportedly Forces UK To Bow Down, Could Agree To Pay £50bn For Brexit Divorce

$1 Billion Is The Price For Freedom For Arrested Saudi Prince In Corruption Crackdown: Reports

U.S. Capital Washington Appears To Be In Range Of The Latest Missile Launched By North Korea

Ten biggest fears of millennials