major macro economic indicators
|GDP growth (%)||8.5||26.3||4.3||3.2|
|Inflation (yearly average) (%)||0.3||0.0||0.0||1.5|
|Budget balance (% GDP)||-3.7||-1.9||-0.9||-0.5|
|Current account balance (% GDP)||1.7||10.2||9.5||9.7|
|Public debt (% GDP)||105.4||78.7||77.1||75.0|
- Flexible jobs and goods markets
- Favourable business climate, attractive tax regime
- Presence of multinational companies
- Specialisation in high-added-value sectors (including pharmaceutics, IT and computers, medical equipment)
- Dependence on the European economic situation, and UK in particular
- Vulnerability to changes in foreign company strategies
- Continuing high level of public and private debt
- Banking sector remains vulnerable to shocks
Growth remains strong but uncertain medium-term economic outlook
Growth, which was artificially swollen in 2015, because of the repatriation of financial assets by some multinationals and the arrival of an aircraft leasing company (real GDP increase was approximately 4.5% excluding these exceptional factors), continued in the right direction in 2016. Multinational companies domicile their operations in the country to take advantage of the low corporation tax rate (12.5% at the most) but any positive effects of their activities are limited as most of these activities take place outside Ireland. The domestic market however gains momentum and there is some additional job creation. Unemployment has fallen and wages are rising, which should help drive consumption in 2017, whilst investments are likely to slow unless there are some new initiatives from multinational companies (in particular patent transfers). House building is however expected to continue. The high level of corporate debt and non-performing loans (mortgages, SME loans) still held by banks will continue to impact on credit availability to smaller companies. Stress tests carried out in 2016 by the European Banking Authority also revealed that Irish banks were still overly vulnerable to economic shocks.
In terms of foreign trade, the depreciation of the pound sterling, under the Brexit effect, could continue to impact on the Irish home economy, and in particular the agri-business sector, whilst multinationals, whose sales are denominated in other currencies, are relatively immune. Exports should however feel the benefits of a gradual increase in demand in other export markets.
There are other medium term challenges. If the United States reduces taxes on business, US multinationals could decide to repatriate some of their business operations and some of their profits to their country of origin. On the other hand, the withdrawal of the United Kingdom from the EU could lead to British companies relocating to Ireland.
Inflation is likely to rise in 2017 alongside the gradual rise in energy prices and possible tensions in the job market.
Continuing surplus in external accounts and a public debt that is gradually being reduced
Ireland’s current account returned to surplus in 2013 thanks to a contraction in domestic demand and an improvement in its cost-competitiveness (the unit cost of labour rose slightly in 2016 but remains well below the levels seen prior to 2015). The current account surplus remains substantial. Exports growth rate slowed in 2016 because of weaker demand for chemical and pharmaceutical products (#1 exports) and a reduction in domiciliation by foreign companies. Slowing demand in the United Kingdom (15% of Irish exports) was however offset by strong growth in exports to China and the United States, and this trend is likely to continue in 2017.
The country ended, in late 2013, its international rescue plan without having to call on the Precautionary Credit Line. Thanks to economic growth and budget cuts, public deficit has been significantly reduced and national debt, which had literally ballooned between 2008 and 2012 as a result of the banking sector bailout and the recession, is gradually being reduced. In this context, the government now has increased room for manoeuvre which should enable it to cut taxes on lower income families and restart public investment. The increasing importance of corporation tax for government revenues means that the public accounts are more vulnerable to any changes in the strategies of multinational companies.
A fragmented political landscape
The inconclusive result of the February 2016 parliamentary elections delayed the formation of a new government. Parliament finally approved the appointment of Enda Kenny, leader of Fine Gael, as Prime Minister. He has been leading a minority coalition government since May 2016 that includes members of his party and a diverse mix of independent members of parliament. The second biggest party in parliament, Fianna Fail, the long-term rival to Fine Gael, agreed to abstain in parliamentary votes until the end of 2018. Any election ahead of the scheduled elections due to be held in 2021, would probably lead, once again, to a hung parliament.
Last update : January 2017
Cheques are generally used for both domestic and international commercial transactions although, for international transactions, the use of bills of exchange is preferred.
Bank transfers are common with SWIFT transfers being utilised regularly. These are often seen as a quick and efficient method of payment.
Direct Debits and Standing orders are also becoming more recognised as an effective method of making payment for regular and expected financial transactions.
The debt collection process usually begins with the debtor being sent a “demand for payment” followed by a series of further written correspondence, telephone calls and, debt value permitting, personal visits and debtor meetings. Each stage of the collection process is designed to escalate from an amicable – pre-legal- collection phase towards litigation should the debtor fail to remedy the debt.
Where there is no specific interest clause, the rate applicable to commercial contracts concluded after 7 August 2002 (Regulation number 388 of 2002) is the benchmark rate, i.e. the European Central Bank’s refinancing rate, in force before 1st January or 1st July of the relevant year, marked up by seven percentage points and applied to the contracts via a percentage calculated per day past due date.
For claims exceeding 1,270 Euros, debtors may be threatened with a “statutory demand” for the winding-up (Closure) of their business if they fail to make payment or come to Acceptable terms within three weeks after they receive a “statutory demand” for payment (a “21-day notice”).
Thereafter the debtor is regarded as insolvent (Companies Act 1963/2009, section 214, amended in 1990 and 2001).
In ordinary proceedings, creditors who hold material evidence of a claim (contractual documents, acknowledgement of debt, unpaid bills of exchange) which the debtor has no valid basis for contesting, may seek a “summary judgment” from the court and thereby obtain a writ of enforcement more quickly.
If a defendant fails to respond within the allotted time to a court summons (either a plenary or summary summons before the High Court, a civil bill before the Circuit Court, or a civil summons before the District Court), the creditor may obtain a judgement by default based on the submission of an affidavit of debt without a court hearing.
An affidavit of debt is a sworn statement that substantiates the outstanding amount and cause of the claim. It bears a signature attested by a notary or an Irish consular office.
The claim amount at stake will determine the competent court: the District Court, then the Circuit Court, and, for claims exceeding 38,092.14 Euros, the High Court in Dublin, which has unlimited jurisdiction to hear civil and criminal cases and to assess, in the first instance, the constitutionality of laws enacted by Parliament (Oireachtais).
The creation on 12 January 2004 of a commercial court – as a special High Court division – competent to hear commercial disputes exceeding one million Euros, included in a commercial list or cases concerning intellectual property, provides a suitable and rapid examination of the cases submitted.
By improving the commercial litigation process, the commercial court has become more efficient and has therefore increased in popularity among business users.
When a defendant answers a summons, asserts his rights, and refuses to make payment, relatively formal plenary proceedings are instituted wherein the court gives equal importance to the case documents submitted by the parties – with possible recourse to the discovery system for the submission of adequate evidence – barrister’s arguments, and oral testimonies presented at the main hearing.
Customarily, depending on the judge’s decision, court costs are borne by the losing party.
The Court judiciary consists of:
The Courts of Ireland consist of the Supreme Court, the Court of Appeal, the Court of Criminal Appeal, the High Court, the Circuit Court and the District Court. The courts apply the laws of Ireland. Ireland is a common law jurisdiction. Except in exceptional circumstances, court hearings must occur in public.
The Supreme Court and the High Court are established by the Constitution. The High Court also has authority to interpret the Constitution. It also tries the most serious criminal and civil cases, and hears certain appeals from lower courts.
Beneath the superior courts are the Circuit Court and the District Court. The Circuit Court deals with matters that must be tried before a jury. The District Court deals only with minor matters that may be tried summarily.
The Republic Of Ireland has a “common law” system.
The Circuit Court (Irish: An Chúirt Chuarda) of Ireland is an intermediate level court of local and limited jurisdiction in which hears both civil and criminal matters. On the civil side the Circuit Court has a considerable parallel jurisdiction — including equitable remedies — with the High Court but normally cannot award damages of more than €75,000.
The civil jurisdiction of the Circuit court is limited to a compensation claim not exceeding €75,000.
Civil matters heard in the Circuit Court can be appealed to the High Court.
The civil jurisdiction is limited to damages not exceeding €15,000; the court has no equitable jurisdiction.
Taking a Civil Case
There are various types of civil claims that you may take to court or be obliged to defend in court.
Many cases do not get to court because they are settled in advance.
After the court case, if you are unhappy with the outcome, you can appeal the decision.
Whether your case is heard in the District Court, the Circuit Court or the High Court will depend on the value of your case, i.e., how much you claim the Defendant should pay you.
The District Court has power to award up to 6,348.69 euro in damages. The Circuit Court has power to award up to 38,092 euro in damages. The High Court has unlimited power to award damages.
To commence proceedings, you must issue and serve a written court document called a writ or pleading.
Time Limits for Actions
A claim based on breach of contract or libel must be brought within six years of the breach or publication.
Cases relating to land generally must be brought within 12 years.