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After decades of prosperity Ireland's economy crashed following the global financial crisis

The Republic of Ireland occupies 80% of the island of Ireland. The remainder, Northern Ireland, is a part of the UK. The interior is largely lowlands interspersed with numerous lakes and bogs. Ringing the lowlands, around most of the coast, are low mountain ranges—the highest peak is only 1,040 metres above sea level.

Ireland's people are largely of Celtic descent and Roman Catholic, though there are also small numbers of Anglo-Irish Protestants, a legacy of the period of English rule. Irish, or Gaelic, is the first official language but only a tiny minority use it; English is spoken almost universally.

Until recently, Ireland was a country of emigration, chiefly to the UK and the USA. More than one million Irish-born people live abroad—around 40 million Americans claim Irish ancestry. But recent years of rapid development have encouraged some of the diaspora to return—and attracted many other nationalities. In 2007, net immigration was 67,000.

Agriculture remains a significant, though declining, part of the economy. Much of this is based on the rearing of livestock for milk and beef which, along with the export-oriented food processing industry, still employs around one-fifth of the workforce. Ireland's agriculture benefited greatly from EU subsidies, though these have now declined.

Irish workers now have plenty of alternatives to farming. In the past decade manufacturing and service industries have been booming. Tourism is also a major earner. The eight million visitors each year employ 8% of the workforce.

The Irish government can take credit for the industrial transformation. It offered generous grants and tax concessions while restraining wage claims through ‘social contracts’ with the trade unions. It has also invested heavily in higher education.

Attracted by financial incentives and an inexpensive, well-educated, English-speaking population within the European Union, foreign companies understandably flocked. Ireland now has affiliates of more than 1,000 foreign enterprises, including major computer companies such as IBM, Intel, Fujitsu, and Dell. Computer equipment along with pharmaceuticals, chemicals and electrical equipment now account for the bulk of exports.

This stimulated rapid economic growth—turning Ireland into an ‘emerald tiger’ with one of Europe's most rapid growth rates. But the wealth was not evenly spread: property prices in Dublin rocketed while the west of the country was left behind. Moreover, this unbalanced growth inflated a credit and property-based bubble which was suddenly deflated by the global financial crisis. In 2008 the economy sank into one of Europe's deepest recessions.

The Catholic Church's influence has waned

Ireland has also been going through rapid social and political changes. Under the influence of the Roman Catholic Church, Ireland has been very conservative in such matters as abortion, homosexuality, and divorce. But the Church's influence has waned and divorce finally became legal in 1997.

At the same time, the political landscape was transformed by the settlement of the long-running conflict in Northern Ireland. The island was partitioned by the 1921 Anglo-Irish Treaty and the south became independent in 1922. For decades, Irish politics was shaped by attitudes towards the north. The largest party, the nationalist Fianna Fail, was formed in opposition to the treaty, insisting on Irish jurisdiction over the whole island—the name means ‘militia of Fál’, a stone monument. The second largest is the centre-right Fine Gael (‘Irish nation’), which represented landowners and the business community who accepted the terms of the treaty. Irish politics did not therefore split along right–left lines, but according to attitudes to partition. There is also a Labour Party, but it has always been much smaller.


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