A little over a quarter of a century ago, the former tánaiste, Mary Harney, posed a pivotal question: Was Ireland closer to Boston or Berlin?
To many, the question seemed a tad loaded. Berlin was the embodiment of Europe’s high-tax, stringent regulatory approach. Meanwhile, Boston symbolised the agile, entrepreneur-friendly American model.
While reality defied such a binary classification, the shorthand was clear: Berlin’s safety nets versus Boston’s capitalism.
Given her Progressive Democrat ties and her audience—the American Bar Association—Harney asserted that we were “spiritually” closer to Boston.
Throughout the ensuing years, Ireland has fluttered between these two ideologies.
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A Decade of Growth and Transformation
Over the past 10 years, the debate seems rather redundant now. Economic growth rich in job creation and investment definitively places us more on the American side.
- Jobs Created: 906,000 since 2012; 453,000 since 2019.
- Multinational Wage Increase: From €8 billion in 2012 to about €25 billion by 2024.
Such statistics portray a kind of “Delaware on steroids,” marking Ireland’s Americanisation.
Celtic Tiger and the EU Connection
Amidst the Celtic Tiger boom, a period defined by rapid growth and lenient regulation, we viewed ourselves akin to a US-style economy, distancing from Europe’s bureaucratic rigour.
However, post-2010, Europe’s rule-driven system—with its common-sense metrics—became a lodestar. It was the no-nonsense Finnish bureaucrat, Olli Rehn, dispatched by Brussels to oversee the bailout, symbolising this shift.
Economic Juxtaposition: US vs. EU
Europe currently finds itself at a standstill. GDP growth in the eurozone slipped to zero in the last quarter of 2024, according to Eurostat.
- Challenges: Germany faces a manufacturing decline, whilst political instability tangles Germany, the UK, France, and Italy.
Nonetheless, following the US model is not without its dangers. While Ireland mirrors the US in growth expectations with a predicted 2% rise in 2024, it also increases our exposure to American policy unpredictability, as highlighted by S&P Global.
Trump’s Resonating Impact
US policy, particularly under Donald Trump’s influence, poses significant uncertainty. This week, Trump is reportedly initiating tariffs on Canada, Mexico, and China, threatening economic dynamics.
[Trump warns tariffs may bring ‘pain’ to Americans, as Canada and Mexico retaliate](https://www.theguardian.com/us-news/trump-warns-tariffs)
An incident with Colombia illuminates Trump’s zero-sum diplomacy. Following their refusal to land deportee flights, Trump threatened tariffs prompting a quick concession from Colombia given their reliance on US trade.
Trade Adversities
At the World Economic Forum in Davos, Trump bluntly asserted that producing in the US or facing tariffs was the order of the day. The implications for Irish exports, valued at €54 billion to the US, remain uncertain due to the unpredictable gap between Trump’s words and actions.
[Analysis: Trump’s trade wars are bad news for Ireland. Just how bad remains to be seen](https://www.irishtimes.com/opinion/analysis-trumps-trade)
The Tax Burden Quandary
Tax issues may loom larger for Ireland. In his prior administration, Trump enacted the Gilti tax, targeting multinational profits, sparking further IP relocation to Ireland— a likely influence on Washington’s future moves.
While much of Trump’s rhetoric targets Germany, particularly its auto exports, it’s intertwined with his commitments to supportive voters in the Rust Belt, looking to revive or attract investment to the faltering US car industry.
