Ireland Is Trapped in Its American Dream

A strange thing happened in the eurozone economy at the end of last year. Despite widespread forecasts that the common currency area would plunge into recession and register negative growth in the last quarter of 2022, it managed to eke out a small gain of 0.1 percent. What is remarkable is not that Europe beat expectations, but that it was one small country—Ireland—whose surging economy single-handedly prevented the eurozone from slipping into the red.

Almost unbelievably, little Ireland, with a population of only 5 million, now has the economic scale to shift the growth statistics of the entire eurozone and its 343 million inhabitants. In 2022, Irish GDP growth of 12.2 percent compared to 3.5 percent in the eurozone as a whole. In absolute numbers, only Germany, France, and Italy contributed more than Ireland to eurozone GDP growth in 2021 and 2022. Ireland’s economic boom has enabled the country’s government to post a budget surplus of 1.6 percent of GDP, even as eurozone countries struggled with an average deficit of more than 3 percent.

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