From yesterday, via Ronan Lyons in the comments… I wasn’t aware of it simply because the Wall Street Journal has a paywall so I rarely visit.
The Emerald Isle has high unemployment and one of Europe’s deepest budget deficits, and is taking some of Europe’s harshest austerity medicine. Economists, however, are starting to feel less dismal about Ireland’s prospects because of the unique nature of its export economy.
Exports account for more than 50% of Ireland’s gross domestic product, ahead of even Germany. And while many euro-zone countries’ exports go to their European neighbors, Ireland sends much of its chemicals, business services, technology and food to the U.S. and U.K. That maximizes the benefit of the falling euro, which has lost approximately 15% against the U.S. dollar and 8% against the British pound since the beginning of the year.
As Ronan notes, it contrasts with the NYT feature, also yesterday.
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The greatest benefit to Ireland of our guest factories is pay to employees and the taxes paid as the profits flow out of the country, mainly. So the boost to GDP will not be fully reflected in GNP. Still, it will make the frightening level of borrowing less…. frightening?
There will also be a gain as BHO shuts down those tasteless tax shelters in tiny islands and shonky pricipalities that do not have Double Tax Agreements with other countries. Tsk, tsk, tax avoidance! How shocking. Here are your winnings….