MG4031 week 3 lecture 2

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Questions and Answers

What was a primary benefit for Ireland after joining the EEC in 1973?

Elimination of unemployment issues immediately

Access to various European funds and policies (correct)

Increased reliance on the UK markets

Restriction on foreign direct investment (FDI)

Which policy was introduced by the Fine Gael-Labour government in the mid 80s to address economic issues?

Increase in social welfare benefits

Complete deregulation of industries

Higher taxation to reduce national debt (correct)

Introduction of lower corporate taxes

What was a consequence of the Oil Crisis in 1973 for Ireland?

Immediate economic growth in all sectors

A significant increase in foreign investments

Reduction in the number of incoming companies (correct)

Strengthening of indigenous industries

What was a focus of the IDA’s Strategic Plan from 1982-1992?

Attracting high-output companies with advanced technology Signup and view all the answers

The Industrial Development Act 2 (1981) primarily allowed what?

Employment grants regardless of investment Signup and view all the answers

How did the Programme for National Recovery initiated by the government impact tax policy?

It resulted in lower income tax in exchange for wage agreements Signup and view all the answers

Which of the following factors became a significant advantage for Ireland in attracting foreign investment during the 80s?

An educated and young workforce Signup and view all the answers

What was the effect of the US recession on Ireland's attempts to attract FDI during the 80s?

It hampered efforts to draw US FDI to Ireland Signup and view all the answers

What was a significant change introduced in the 1999 budget regarding personal allowances?

A tax credit system was introduced providing equitable personal allowances. Signup and view all the answers

What economic phenomenon is associated with the period of rapid growth known as the Celtic Tiger?

An annual growth rate of roughly 9%. Signup and view all the answers

What was one of the actions taken by the Irish government in response to the financial crisis in 2008?

Issuing a blanket guarantee on all deposits and debts of certain banks. Signup and view all the answers

What was the primary aim of the National Asset Management Agency (NAMA) established in 2009?

To buy large non-performing loans from banks at a discount. Signup and view all the answers

Which year marked the peak of unemployment in Ireland during the financial crisis?

2012 Signup and view all the answers

Which sectors were key to the Irish economy following the recovery plan initiated in 2011?

Biopharma and Clean Technology. Signup and view all the answers

What economic change followed the introduction of the Euro in January 2002 in Ireland?

Continued strong performance of exports over imports. Signup and view all the answers

What was the monetary value of the IMF bailout that Ireland was forced to negotiate in November 2010?

€85 billion Signup and view all the answers

Study Notes

EEC Membership and Irish Development

Ireland joined the EEC (European Economic Community) in 1973 with the UK and Denmark.
This allowed access to the CAP (Common Agricultural Policy), ECSC (European Coal and Steel Community), and EAEC (European Atomic Energy Community).
Ireland received aid from European Social, Regional, and Cohesion Funds in the 70s and 80s.
This reduced reliance on the UK market.
Joining the EMS (European Monetary System) eliminated reliance on the British Pound.
US investment was significant until the 1973 Oil Crisis.

Recession and Recovery (1980-1993)

Economic situation worsened until the mid-1980s.
A Fine Gael-Labour government introduced higher taxes to reduce national debt.
Unemployment rose over 10% from 1980-1985.
Emigration resumed and economic growth slowed.
IDA attempts to attract US FDI were hampered by the US recession.
The IDA's Strategic Plan (1982-1992) focused on attracting companies using advanced technology.
Promotion shifted from financial grants to human capital.
Industrial Development Act (1981) provided employment grants, attracting service companies.

The Social Partnership Model (1987) resulted in lower income tax in exchange for modern wage increases.
The Fianna Fáil-Labour coalition government changed taxation policy.
Emphasis was broadened tax bands and allowances for lower income earners.
The 1999 budget introduced a tax credit system to create more equality in allowances among citizens.

Financial Crisis (2008-2012)

Early warning signs from the US in 2007 regarding subprime mortgage market issues.
Irish banks faced significant losses.
Government guaranteed all deposits and debts in certain Irish banks.
The establishment of NAMA (National Asset Management Agency) to acquire non-performing loans from banks.
NAMA acquired €77 billion in non-performing loans.
Ireland negotiated an IMF bailout (€85 billion) in 2010.
Unemployment peaked at 16% in 2012.

Recovery and Key Sectors

The new Fine Gael/Labour government launched a NewERA plan in 2011 based on the National Recovery Plan.
Cuts in expenditure, tax increases, and recovery of the nation.
Ireland exited recession in 2012.
The following are key business sectors in Ireland: Business Services; Financial Services; Engineering; Clean Technology; Internet; ICT; Cloud Computing; Internet of Things; Software; Biopharma; Medical Technologies.

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Description

This quiz explores Ireland's membership in the EEC and its impact on the country's development during the 1970s and 80s. It also examines the challenges faced during the 1980-1993 recession and Recovery efforts. Test your knowledge on key policies, economic indicators, and historical events during this transformative period.