Why foreign investors are buying in to Ireland
Ireland has been rewarded for sticking to the plan set down by its international creditors with new waves of foreign investment – but this may not be enough to restore it to health.
The most recent example of international investors giving Ireland the stamp of approval, after its bailout exit in December, was the successful sale of 3.75 million euros ($5.1 billion) worth of Irish government debt on Tuesday. Much of the offering was bought up by foreign investors, particularly from Northern Europe, according to market sources, which could help to dispel the worry that peripheral euro zone countries may become more exposed to their own debt if domestic banks buy up their country's bonds.
(Read more: Euro zone bond rally may be ending: Here's why)
Commercial property investment has also picked up, after plummeting following the unprecedented boom of the pre-crisis. Private equity group Blackstone is buying three Dublin office buildings from the National Asset Management Agency (Nama), the manager of Ireland's bad debts, for around 100 million euros, according to Dublin property sources. And Google is adding a fourth building to its property portfolio in the capital in the next couple of weeks, according to property sources, which will raise expectations that it will start hiring again in Dublin.
These buildings are linked to developer Seán Dunne, who was dubbed the "Baron of Ballsbridge" for his ambitious pre-credit-crisis plans to build Ireland's tallest building, backed by Icelandic bank Kaupthing. Dunne, now living in the U.S., has been declared bankrupt in Ireland and the U.S.
(Read more: Ireland's bond auction)
The sale of property assets does not mean a boost to the economy, however.
It is rather investment from technology companies like Google, banks like Deutsche Bank and healthcare firms like Novartis - attracted by Ireland's lower corporation tax rate and a young, well-educated and English-speaking population – that creates new work and benefits the broader economy, Barry O'Leary, chief executive of IDA Ireland, told CNBC.
"Buying up assets is not necessarily what brings additional investment into Ireland," he said. "If you look at activity that's adding value to the real economy, look at recent announcements from multinationals."
The pipeline for the first half of 2014 also looks promising, with further investment from young internet-based companies like TripAdvisor and Airbnb expected this year.
Yet Ireland's economic turmoil is far from over.
Youth unemployment of nearly 25 percent in November 2013 has come down from 29 percent at the same time in 2012, but is still above the euro zone average - and does not including the number of young people who have emigrated.
Debt levels also remain high, with nonfinancial debt more than four times annual gross domestic product (GDP) in 2012. This includes debts for nonfinancial businesses, households and nonprofits of more than three times GDP – suggesting that the average Irish business and consumer is still struggling under hefty debt, and vulnerable to any rise in interest rates on repaying that debt.
Even Tuesday's much-feted bond sale was met with cynicism from some.
"It's very important that Ireland borrows money so we can keep paying back the money we borrowed to pay back the money we didn't borrow," Declan Ganley, one of the best-known opponents of the Irish bailout, told CNBC.
"This is part of the price of getting out of the huge mistakes that Ireland made in the banking bailout and accepting the terms that were imposed upon them by the ECB and the European Commission."
- By CNBC's Catherine Boyle. Twitter: @cboylecnbc.