Eurostat released comparatives for GDP per capita and Actual Individual Consumption across the EU28 for 2013. And the results are bleak - for the likes of Ireland and rest of the 'periphery'.
Full release is here.
Key takeaways:
Chart 1 plots actual individual consumption in EU28. Ireland at 97 is in a poor 12th position, below EA18 average of 106.0 and below EU28 average of 100. Ireland is on par with Italy and is ahead of only 'peripheral' and Eastern European states.
But we are in an honourable 5th position when it comes to GDP per capita, thanks to the massive tax optimisation by MNCs driving our economy's aggregate numbers. At 126 reading for Ireland, we are well ahead of EA18 reading of 108 and EU28 reading of 100:
As I noted in my WallStreet Journal oped (here), Ireland is suffering from a tax-optimisation induced 'resource curse'. Here is the illustration:
Note: three countries under the EU Commission tax probe are the top three in the size of the gap between GDP per capita and individual consumption. Luxembourg is by far the leader here - partially due to same causes that drive Ireland's and Netherlands' gaps (MNCs tax optimising) and partially due to the fact that much of Luxembourg's labour force resides outside Luxembourg. Which means it's gap of 91.3% is over-exaggerating pure effects of tax optimisation on its economy.
So here we have it: Ireland's allegedly spending-happy consumers are below EU average, while our allegedly employment-generating MNCs are driving up activity that is not translating into actual spending by people living here... It's a resource curse, on par with what is happening in Luxembourg, Switzerland and Norway.
Full release is here.
Key takeaways:
Chart 1 plots actual individual consumption in EU28. Ireland at 97 is in a poor 12th position, below EA18 average of 106.0 and below EU28 average of 100. Ireland is on par with Italy and is ahead of only 'peripheral' and Eastern European states.
But we are in an honourable 5th position when it comes to GDP per capita, thanks to the massive tax optimisation by MNCs driving our economy's aggregate numbers. At 126 reading for Ireland, we are well ahead of EA18 reading of 108 and EU28 reading of 100:
As I noted in my WallStreet Journal oped (here), Ireland is suffering from a tax-optimisation induced 'resource curse'. Here is the illustration:
Note: three countries under the EU Commission tax probe are the top three in the size of the gap between GDP per capita and individual consumption. Luxembourg is by far the leader here - partially due to same causes that drive Ireland's and Netherlands' gaps (MNCs tax optimising) and partially due to the fact that much of Luxembourg's labour force resides outside Luxembourg. Which means it's gap of 91.3% is over-exaggerating pure effects of tax optimisation on its economy.
So here we have it: Ireland's allegedly spending-happy consumers are below EU average, while our allegedly employment-generating MNCs are driving up activity that is not translating into actual spending by people living here... It's a resource curse, on par with what is happening in Luxembourg, Switzerland and Norway.
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