David McWilliams: Ireland’s financial strategy can be summed up as talking European, walking American, sounding Irish

Although Ireland might be aiming to become more European, we are doing so with American money.

Ireland is now unambiguously wedded to a European social democratic standard; the UK is shifting rapidly towards Dixieland.

Although Ireland might be aiming to become more European, we are doing so with American money.

Sounding Irish is critical because to carry off this policy, you need to have a sovereign political entity that can re-orientate policy and taxes to make the country or region ready for investment.

Talking European is essential because you must be in the EU market; and by spending the tax gains on redistribution and employment, as the European social democratic model requires, we have a European-style social and political framework.

Ireland has gone through four decades of breakneck industrialisation and massive capital investment, creating an entirely new economy that sits side by side with the local economy and is integrated into the country’s social fabric by employment, taxes and spin-offs.

Without the foreigners, attracted in by relatively low corporation taxes, personal taxes would be much higher here, or State spending and services would be much lower.

Wages, taxes, profits are all based on productivity and its handmaidens, capital intensity and education.

Low taxes without higher productivity mean poverty for the many and outsized riches for the few.

Low taxes on their own do not spur productivity; capital investment does this; it takes decades and must be accompanied by years of investment in education and people.

With Ireland now signed up to OECD minimum taxes, the tax haven slur is over.

In a globalised world, where capital does not live anywhere, Ireland operates more like a state such as Connecticut than it does an old-fashioned nation.

Foreign multinationals account for 32 per cent of all employment taxes and 53 per cent of employment taxes of corporate employers, and account for €12.342 billion net receipts – 80 per cent of net corporate tax receipts.

Without this money, taxes on Irish incomes, spending and wealth would have to be much higher in order to pay for the health, education, civil servants salaries and welfare levels that citizens now enjoy.

In a globalised world, where capital does not live anywhere, Ireland operates more like a state such as Connecticut than it does an old-fashioned nation.