In the early years of this decade during the depths of the crash, Philip Lane (then an economics professor in Trinity) was a regular source of mine for guidance through the crazy spiral in which the country found itself. 

When wrapping up after one interview, he said to me that he thought the crash would wipe ten years off the growth of the economy. He said we were looking at a lost decade. It was a dire prediction but seemed entirely apposite at the time. 

Happily, it didn't take a decade for the economy to turn around. 

That was in large part thanks to the man who recruited Lane to his current job as Chief Economist at the European Central Bank.

As Governor of the ECB, Mario Draghi pumped trillions (€2.6trn and counting...) of euro into eurozone money markets zapping doubts over the future of the single currency. 

Mario Draghi

Bond rates came crashing down, reducing the cost of borrowing for heavily indebted countries like Ireland. It wasn’t the only factor in our turnaround but it was a very important one. 

If the twin-headed hydra of our property and banking crises began the past decade, it was Mario Draghi’s walk-on role as Hercules which shifted us into the present. 

But no good deed goes unpunished. 

The debate over what the ECB did to end the eurozone crisis is still being thrashed out. Savers are screaming over negative interest rates. Defenders say the current slowdown in the eurozone would be much worse without the central bank’s action. 

And the twin beasts of our property and banking crises weren’t really killed off. We’re just learning to cope with them without worrying the country will shut down in the process. 

A quick précis of the economy’s darkest years: Property prices collapsed by upwards of 60%. Unemployment soared to over 15%. Tens of thousands of people defaulted on their mortgage payments. The banking sector which had depended on access to international credit markets to fuel those property loans imploded. The liabilities of the banks became the liabilities of the State. The phrase at the time was a 'sovereign bank doom-loop'. 

And Ireland was well and truly looped, bailed-out and bewildered. 

Shudder, shudder. 

The legacy of the crash hasn’t gone away. 

Housing construction collapsed by an incredible 95% from a boom-time peak of 93,000 units in 2006 to a low of 4,575 units in 2013. The industry has been struggling to catch up since - even while the population has steadily increased. 


This year will see approximately 21,000 housing units completed. A study by the Central Bank suggests we need a minimum of 34,000 units every year for the next decade. 

Rising rental costs and property prices have slowed (and prices have even declined in recent months in Dublin) but accommodation in all its forms remains a serious problem not just for the economy but for society as a whole. 

Even with the recovery in construction, the numbers working in the industry today stands at 145,000 compared to 240,000 at the height of the boom. It had fallen to just over 80,000 in 2013. That’s thousands of livelihoods uprooted.

But unemployment is now less than 5% and Ireland seems no longer as attractive to construction workers from abroad as it was in the past. So it seems we’ll be playing catch-up for some time. 

Our banks also bear the bruises of the bailout. Our mortgage rates are twice the eurozone average. That’s been partly blamed on the additional funding costs our banks have because of the extra risk attached to them and their portfolios of property loans. 

And neither are the markets in love with them. The decline in their share prices over the past two years makes the prospect of the State recouping some more of the bailout remote for now. 

The surge in our national debt following the bank and budgetary bailouts has also left a legacy. General Government debt has remained above €200bn since 2012. As the economy has grown and interest payments have gone down, it has become more manageable but it’s still high. 

We’re now locked into strict EU budgetary rules which have continued to frame our budgets and dictate how much can be spent. And the Minister for Finance recently added to that with a statement of intent to run surpluses in future budgets, starting this year, which has the effect of lowering our national debt over time. 

And then there’s corporation tax. No examination of where our economy has come in the past decade or where it’s going next would be complete without this remarkable gift that keeps on giving. 

Criticism of the tax avoidance practices of large and mainly US multinationals went mainstream in 2013 when a US Senate Committee hauled Apple over the coals. Ireland came under the spotlight as we occupy a key staging post in the convoluted tax webs of several companies.


Something that didn’t get as much attention at the time was the fact that it was provisions in the US corporate tax code which allowed these practices continue. That changed when Donald Trump was elected US President and pulled off the biggest overhaul of its tax code in years.  

A parallel programme of reform was and continues to be led by the OECD: the unwieldy Base Erosion and Profit Shifting (BEPS for short) process. That brought an end to one of the high-profile tax tricks employed by some companies here, the so-called 'Double Irish'. 

However, then something peculiar happened. 

The crackdown on corporate tax avoidance led not to a decrease in corporate tax in Ireland but to a dramatic increase. No one has conclusively got to the bottom of why.

Official estimates of how much corporation tax the State will collect have consistently underestimated the final outcome. 

In 2014, the State took in €4.6bn in corporation tax. This year, despite a forecast decline in corporation tax, the final amount could end up overtaking last year’s haul of €10.4bn. And that was two billion euro more than expected.  

This unexpected windfall has cushioned the public finances through the recovery. The use to which it has been put, including plugging gaps in health budgets gone awry, has been the source of ongoing criticism by the budgetary watchdog, the Irish Fiscal Advisory Council. It would have preferred some of the billions to be spent paying down debt. 

Everyone acknowledges that the corporate tax bonanza won’t last forever. The estimates of what could prove temporary vary between €2bn and €6bn. If that were to suddenly disappear, it would take a big bite out of the public finances. 

The OECD wants to finalise its recommendations for tax reform next year. There has been some recent backsliding by the US which may result in some delay. The implications for Ireland are enormous. 

There has been a lot of interest in the Apple tax case where over €14bn sits in a bank account in London awaiting the outcome of a legal challenge Ireland has taken against a ruling by the European Commission over alleged favourable tax treatment.

But the outcome of the OECD's tax reforms will potentially have a much bigger impact. Our industrial model has depended on tax competition to attract companies to locate and create jobs here for decades.

If that ceases to be an advantage, then the loss of big chunks of tax and the outcome of a tax case will really be a passing note. 

We’ll have to reinvent ourselves. And that’s all before anyone has even mentioned Brexit.