Washington Delegation Press Room

'Celtic Tiger' built on the courage to change
The economic model that transformed Ireland can succeed in Arizona

 

John Bruton
My Turn
The Arizona Republic, April 10, 2006

"No man is an island, entire of itself, every man is a piece of the continent, a part of the main."

- John Donne

Perhaps it is sort of flashback to my early youth when Ireland certainly felt quite separate from the European continent, or perhaps it is the array of challenges that now confront America and Europe - and by extension myself as the European Union's ambassador to the United States.

For whatever reason, the words of English Renaissance poet John Donne still resonate centuries after they were written as I travel around this vast country explaining what the EU is and does and why it's so important to the United States in fostering democracy, fighting terrorism and building a stronger global economy.

Arizonans are currently looking to Ireland's "Celtic Tiger" economy as a possible model for their state. As I visit Arizona today, one of my messages will be that Ireland certainly would not be where it is today were it not for the European Union.

Following independence from Britain, Ireland recognized it could not survive as an island in isolation and thrive. Rather, by joining the EU in 1973, it pooled some of its regained sovereignty with other European countries and entered a partnership of peace built around shared economic goals.

Joining the EU transformed the country's relationship with the United Kingdom from one of post-colonial tension to one of friendly kinship and trust. Economically, Ireland became less dependent on the UK and gained access to the EU market, which today includes 25 countries and 450 million consumers.

Thanks to EU funding over the years, we were able to upgrade our road and telecommunications infrastructure while continuing to invest in our young people through free education. EU disciplines guaranteed the openness of the economy.

Membership of the EU has undoubtedly helped transform Ireland into one of the fastest-growing economies in Europe. Irish people migrate back and workers arrive from other European countries, attracted by the prospect of a high quality of life and the entrepreneurial attitude that made Ireland the Celtic Tiger.

The other factor spurring Ireland's economic turnaround through investment and innovation had to do with political leadership. While business certainly powered the Celtic Tiger, politicians deserve some credit for laying the groundwork. They realized that no one political party had all the answers.

So, to enable Ireland to transition from a largely agricultural economy to one that is now dominated by information technology, service and pharmaceutical companies, there was bipartisan agreement starting in 1956 that Ireland had to be open to, and encourage, foreign investment.

The formula that worked for Ireland meant offering businesses interested in investing certainty of a 20-year fixed rate of corporate taxation. Ireland's rate of 12.5 percent certainly appealed to American companies looking to invest in an English-speaking country, with a young, highly educated and motivated workforce. And our EU membership meant we could provide a bridge to the rest of Europe.

There is no doubt that Arizona can adapt some of the lessons of the Celtic Tiger to suit the economic aspirations of this state. The Celtic Tiger did not happen overnight: It was the result of years of patient reform, at some political cost for all.

It meant the courage to accept change, be it through investment, or immigration. Judging by my conversations with the Arizona state delegation, I can tell courage is not in short supply as this state takes on some of the most challenging topics that will define the economic futures of Europe and the United States in the years to come.



The writer is a former prime minister of Ireland (1994-97) and now serves as ambassador, Delegation of the European Commission to the United States.