A large number of economists recognise in Keynes public expenditure policy an effective tool for development widely used among western countries. This reason might surely explain the uniqueness represented by the Irish situation. The Celtic tiger experienced in 90s an economic boom which can be compared to the boom occurred to south- east Asian country. An important element of this growth is the super-competitive, and super – envied, corporate income tax fasten at 12.5%.. Before the crisis of 2007 such a policy attracted a great volume of foreign investments provoking a reduction of the unemployment which has been as good as drastic. At the same time, Ireland kept its welfare expenditure standards at the same level of many other European States. If in one side this policy favoured an high economic growth, in the other side it has made the public debt increase, deeply.
The budget deficit (the 32% of GDP in 2010) highlights the dangerous under-estimation made by the Celtic government on its ability on honour its payments. Close to the chasm, the Irish government tries to recover with an austerity plan which remembers the recent measures. Adopted by the British government The trend seems to work this way: when a state fails, the welfare Is the first one to pay. Et voilà, at 2 P.M on November the 25th The National Recovery Plan 2011-14 details were announced. The plan will amount to a total of 15 billion euro. The budget provides first big public spending cuts and higher income taxes. The only budget chapter of welfare will suffer a reduction of 800 million, while unemployment benefits are reduced by 12%.
According to rumours, the Europe aid package for Dublin was expected to reach around € 90 billions. What seemed to be only a Mediterranean problem has reached even the cold North Sea. The high risks of infection for Mediterranean countries such Portugal, Spain and Italy predict the worst.
Among many uncertainties one thing seems certain: yet another case of default of a member country of the European Union demonstrates the inability of the same, although the Greek experience, to create a unique rescue package for Eurozone.
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