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Thursday, September 30, 1999 Published at 03:55 GMT 04:55 UK

World: Europe

Celtic Tiger eyes new cash scandal

Irish economy is booming, but it wasn't always this way

The Irish Republic seems set to be wracked yet again over a financial scandal involving prominent businessmen and politicians.

It follows a series of tribunals into what the Irish public regard as at least shady dealings by the great and the good during the 1980s, a decade before the Irish economy became the fastest growing in Europe.

BBC Ireland Correspondent Denis Murray reports on what has become known as the Ansbacher affair.

The Irish public is convinced that in the 1980s, and maybe before, there was what became known as "the Golden Circle" - a small elite of businessmen with dubious connections to politicians.

They were men who were rich to begin with, and who got richer at a time when ordinary citizens were being hit for something like 48% income tax on their wages, paid to the taxman through PAYE.

Tighten your belts, the public was exhorted, things will get better.

And yes, things did get better, to the point where the Irish economy became known as the Celtic Tiger.

Record low unemployment, record high inward investment, more people returning to Ireland than emigrating (emigration was the curse of Ireland for 150 years - before the Great Famines of the 1840s, eight million people lived in Ireland: the census of 1971, when the population was 2.5m, showed the first population increase in a century and a half).

[ image: Charles Haughey: Admitted receiving payments from supermarket boss]
Charles Haughey: Admitted receiving payments from supermarket boss
But new revelations seem to indicate that in the financially tough years of the 80s, people who were already wealthy were involved in what one trade unionist has called a tax scam, when they spirited funds out of the country to a bank in the Cayman Islands called Ansbacher, in order to avoid paying income tax.

None of this has been proved - indeed, many of those named in the Irish media as having Ansbacher accounts have emphatically and angrily denied and involvement, never mind improper involvement.

Weary resignation

There is a list of 120 names of Irish people with Ansbacher dealings - opposition parties want the full list, in the posession of prime minister Bertie Ahern's coalition government, to be published. The government says that is against the law.

The latest revelations come after a series of tribunals into business activities connected to politicians - the most famous the denial by former prime minister Charles Haughey, followed by his admission, that he had received payments from the head of a supermarket chain.

In short, the Irish public believe that all they sacrificed in lean times to help create the Celtic Tiger was as for nought as set against what they see as the corrupt, if not illegal activities, of prominent businessmen and politicians.

They feel there was one tax law for them, and another entirely for people who were rich already.

There is a Celtic Tiger economy - but it is accompanied by a weary resignation among the public that it wouldn't exist without their belt-tightening a decade ago, that entrepreneurs who were supposed to be leading the economic revival were getting into bed with self-serving politicians for mutual benefit, and that some pillars of society may have beeen tax cheats to boot.

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