EU to investigate Ireland's Leprechaun economics

Ireland faces higher EU contribution payments after reporting a growth rate of 26%

EU to investigate Ireland's Leprechaun economics

Rolling News

The European Union’s statistics agency is sending a mission to Ireland next month to investigate Ireland's extraordinary 2015 growth figures.

An internal Eurostat document regarding the figures was sent to Irish Government officials - it said that while the Central Statistic Office (CSO) figures "look plausible" - the European agency wants to go through its own verification process.

The message was released to The Irish Times under the Freedom of Information Act, it says, "The Irish authorities have already indicated that they will provide full access to all information, including that under statistical confidentiality, to Eurostat staff."

"The CSO explained that the majority of the change in 2015 was caused by the relocation of certain major international companies to Ireland (from outside the EU) during the year," it continued.

Ireland's calculation of a 26% increase in GDP was carried out under Eurostat's methodology - it was inflated by aircraft purchases, corporate restructuring, and companies moving assets (particularly patents) to Ireland from other territories.

This stat made headlines on financial pages around the world - Nobel Prize-winning economist Paul Krugman called the phenomenon 'Leprechaun economics.'

IMF reaction

The International Monetary Fund (IMF) requested an urgent conference call with the Department of Finance after the Central Statistics Office (CSO) released the numbers.

The newspaper reports that Michael McGrath, the IMF's alternate director for Ireland, emailed the department's chief economist John McCarthy days after the controversial data was published in an attempt to set up a next-day call with the head of the IMF's Ireland mission, Zuzana Murgasova.

The IMF was finalising its annual article IV review of Ireland at the time.

In the event, a meeting could not be arranged that early, resulting in a note being added to the report saying that its Irish recommendations were not impacted by the upward GDP revision.