Summary Ireland has undergone a remarkable economic transformation over the last decade, resulting in some of the strongest growth rates in Europe. Underpinning this growth is a liberal tax policy and aggressive corporate recruitment. Though this strategy has paid tremendous dividends domestically, Ireland faces increasing domestic and foreign pressures. On the external front, the European Union, which is concerned about inflationary pressures and harmonization, has criticized Dublin's 2001 budget as fiscally unsound. But countervailing domestic pressures - and Irish reluctance to abandon a winning formula - will lead Dublin to dismiss Brussels' censure Analysis The European Commission issued a strongly worded reprimand to Dublin in late January. The former took issue with Ireland's 2001 budget, which calls for $1.5 billion in tax cuts and a 13 percent increase in government spending.