After the Celtic Tiger: Challenges Ahead

The year 2001 was a watershed. The ‘dotcom’ bubble had already burst by the middle of 2000, but the dreaded word ‘recession’ was not much used until people returned to work after the Christmas–New Year holiday in January 2001. Everyone now knows that the US entered a recession in the second quarter of the year; the burning issue is how deep and how long this will be. For a while we Europeans – especially we Irish – smugly believed that we were insulated from the cold winds blowing across the Atlantic. But gradually the truth dawned – the US is the locomotive that pulled the world economy through the boom of the 1990s and when that locomotive began to slow, Europe and Ireland slowed too. As the year wore on commentators in Ireland began to notice that the optimistic projects on which Finance Minister Charlie McCreevy had based his budget of December 2000 were more like pulp fiction than sober economic forecasts.