Celtic Tiger Losing Its Teeth

By Tom Mudd Ireland's phenomenal economic growth in recent years -- which hit double digits last year -- led some to call the little country the Celtic Tiger. But this year has seen the Tiger begin to lose a few of its sharper teeth, as such heavy employers as Intel Corp., Xerox Corp., and Motorola Corp. began announcing big layoffs. The Celtic Tiger seemed on death's door this week, when Gateway Inc. announced that it would close its Dublin factory and its European headquarters, also located there. The closure will throw roughly 900 Gateway employees out of work and could spell doom for another 2,000 or so who work for Gateway contractors. Mary Harney, the deputy prime minister and minister for enterprise, trade, and employment, described the announcement as a "body blow" to the Irish economy. The announcement intensified the belief held in some quarters that the Celtic Tiger might have issued its last roar. Already, the formerly red-hot housing market has cooled considerably, with one luxury property's asking price dropping by 50% within a few weeks, and with average properties staying on the market for far longer than they have in years. Tax revenues also have begun slowing, meaning that there may not be room for another round of tax cuts even though a general election looms sometime next year. The real fear is that Ireland's formerly long-suffering people could wake up one day and realize that they can no longer afford all the $400,000 houses and $35,000 cars, and that the economy could go into a tailspin like the one that hit Massachusetts in 1989. In those days, "For Sale" signs outnumbered "Sold" signs by something like 20 to one.

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