During the general election campaign in 2024, I knocked on a door at the edge of my constituency in Terenure. The man who answered was, like too many people are these days, disillusioned with politics: broken promises, failed delivery, persistent long-term structural problems, poor political leadership, and a system that seems to want to do everything except perform. I understand that cocktail. In many ways, I entered politics to change it.
But at the core of his reasoning was something I hadn’t heard much of, something that is too often unsaid in Ireland: there is severe weakness in the Irish economy. He said, rightly, that we are too reliant on multinationals. He said there was too much of a risk that if things went sideways in the multinational sector, that it would create a perfect economic storm. He was of the opinion that should that day come to pass – and he fervently believed it would, soon – that we would face an economic crisis that would make the 2010s look like a cake-walk.
It’s hard to assuage the concerns of constituents like that one, because I have many of those concerns myself. Ireland’s economy is unique. It is, as that constituent said, dominated by multinationals – I’ve written about that before. But that’s not our only risk factor. Our indigenous sector is starved of domestic credit availability – the lifeblood of any real developed economy – and in that, we come to a time in the 2020s where we are in a uniquely precarious economic position.
So, to the “Four Horsemen” – four major threats to the Irish economic model as I see it:
1. Multinationals layoffs
2. Global trade disruption: war & protectionism
3. Inflation and stagflation
4. A choked indigenous sector
In this blog, I’ll focus on the first two of these major threats. In part two, I’ll follow up a look at inflation and the indigenous sector.
Multinational layoffs:
Let’s start with the Multinationals. Ireland has one of the largest levels of inequality in market earnings in the developed world (we correct for it with our system of redistribution, but that’s a whole other post). What does that mean in the real world? Well, it means that there’s a very good deal of people who are doing very well: mostly multinational workers and those that sell services to multinationals (e.g. accountancy firms, law firms, etc. – in particular, their owners or partners). And then there’s a very large number of people who do not do well: think of those reliant on social protection like those with disabilities, their carers, or those that work in hospitality or retail.
We have full (ish) employment, with a strong presence of multinationals in Ireland. As of the end of 2025, there were 312,468 employed in multinationals according to IDA Ireland. There’s also about 250,00 jobs outside of the multinationals themselves but within industries or companies supported by their presence (IDA client companies spent nearly 40 billion in the Irish economy in 2023). The core success of the Irish economy since the austerity era was not the policies of austerity or getting the public finances under control, as government actors would have you believe. It was the upsurge in multinational employment. In fairness, the former governments and the IDA in particular deserve some credit for that, but it wasn’t so much an economic plan as it was an economic gambit (with no real Plan B).
What that upsurge meant was higher-than-average-waged jobs created by pharmaceutical companies (like Pfizer or Eli Lilly), medical devices (like Covidien or Boston Scientific), electronics (Intel), and software companies (think Google, Meta, Tiktok, etc.). That last category is particularly prevalent in my own constituency in the heart of Dublin. These are very good jobs – good pay and conditions, high value products and services, and crucially permanent (ish) bases for jobs, particularly for those in manufacturing. Latest statistics show that between 2020 and 2025, the number of households earning over €100,000 doubled.
It would not be an understatement to say that these multinationals are the core engine of economic prosperity in Ireland. Beyond the high-income jobs they create and support, that high income gets taxed in our progressive income tax system. Those people on higher incomes tend to have higher disposable income, meaning they also contribute disproportionately to VAT receipts. And, crucially, their accounting magic to access preferential tax rates (not just corporation tax, but PRSI and local taxes like rates and property taxes) lure them to base the majority of their global profits in their Irish entities, fueling a potent but fragile corporate tax boom.
And so we come to the first horseman: multinational layoffs. In the first instance, obviously, a redundancy is a major blow to the individual who loses their job, and their family. It can be catastrophic. But, at scale, there is a wider effect on companies and society.
At a very large scale, it actually has an impact on the fiscal position of the State. So much of our tax base is reliant on this high-income employment category. More to the point, if you take the spending power of these people out of the economy, it has wider effects: fewer people at coffee shops, fewer people buying goods and services, and critically, fewer people able to afford high mortgages.
Recently, as Cliff Taylor in the Irish Times noted, there’s been a 10%+ drop in tech jobs in Ireland in the last year, according to the CSO. A more sobering report this week pointed to up to 40% of tech jobs in Ireland (predominantly Dublin) at risk because of disruption from AI. And unfortunately, that’s not the only thing to be worried about.
Global Trade Disruption – War and Protectionism:
As I’ve written about fairly extensively on this blog before, there’s a significant risk that Trumpian economics signifies a drastically different global economic trajectory than that of the post-war period. To put it very briefly, after World War 2, there was a significant amount of cooperation economically in the world. That was supercharged with a more liberal international trade system, where things like tariffs and other barriers to trade were reduced. With very few exceptions (China being one), the world became a lot more globalised economically. Capital flowed across borders, trade between countries went up (and got a lot more complicated), supply chains became dependent on multiple geographies, and workers (and especially Irish workers) moved all over the world.
Not everything about this was good. The neoliberal era has a lot to answer for. But it did mean that heretofore global competitors were now in it together. The EU’s single market is probably the best incarnation of this – one of the few economic projects that has paid very real peace dividends.
Ireland was very uniquely positioned to do well from this. A gateway for American companies into European markets, a full-throated supporter of greater European economic cooperation (if it wasn’t always reciprocated), and as an island with a small population one that was reliant on trade to keep its economy chugging.
Trump’s vision for the global economy is entirely different. He sees it as zero-sum, much more like his 19th century predecessors than those of the 20th. He believes in any trade scenario, the US should always come on top. And in the context of a country with vast natural resources, the world’s reserve currency, and a massive industrial base, he has a lot of leverage.
Unfortunately for the rest of us (other than China, really), that means the US President’s vision for American economic hegemony becomes the de facto global economic policy for everyone. And it emboldens him to play dictator on the world stage – bombing Iran, kidnapping Maduro, starving Cuba. The economic power he wields has led him to believe that it is not just enough to have advantageous trade deals, but that America should dominate in every arena and in every part of the world where it has interests.
That has led to 2 major dynamics. Firstly it means an increase in global country-level trade competition, where tariffs and trade barriers and indigenous companies are main points of leverage for every country’s economic future. Secondly, it means that the previously interconnected world where oil on one side of it would fuel the economy of another, or where supply chains could run through a dozen countries to produce a high-value product, is slowly receding. Economic competition and military competition are now increasingly interchangeable – the 19th century game of realpolitik where politics was a spectrum of force and negotiation seems to be starting to return.
Okay, so what does this mean for Ireland, tangibly? Well, it means that a company like Covidien maybe can’t import sufficient plastics for developing medical devices, or cattle distribution falls because of rising shipping costs, or tariffs make Irish beef uncompetitive in other markets, or selling services from Google or Meta to low-leverage, lower income countries becomes impossible, or the resource-intense nature of a war leaches important raw materials away from pharmaceutical economic activity in Ireland to wartime efforts somewhere else. These kinds of dynamics can be swift and drastic, and can have huge effects on business activity and therefore jobs. It was the central fear at the outset of the war in Iran, where the situation continues to develop in concerning ways.
Next Time:
The threats of global trade disruption and multinational layoffs are enough to cause serious concern about the trajectory of the Irish economy and the sustainability of our economic model, but they are not the only threats. I’ll post the next part of this blog soon, where I dive into other two horsemen which pose significant danger: Inflation & Stagflation, and a choked indigenous sector.