The Irish economy’s dependence on foreign multinationals is without parallel in the developed world. Foreign-owned companies account for a larger proportion of jobs – in both services and manufacturing – than in any other country in the 34-member OECD. Of the €177 billion earned from exports last year, 90 per cent was generated by non-Irish companies. And the lion’s share of business investment in high-tech research and development is made by these firms.

It can safely be said, such is the importance of the sector, that if an exodus of multinationals located in this jurisdiction occurred in a short timeframe, the ensuing decline in living standards would dwarf even the historically large falls experienced in the aftermath of the property crash.

Given their importance for our national well being, it is hard to think of a more important national interest than ensuring that the wealth-creating activities of foreign-owned companies are maintained. As such, the government and its agencies need to be on permanent high-alert for threats that might affect this vital national interest.

Among the greatest potential threats has been the change over the past half decade or so in how governments internationally have focused on stopping individuals and companies evading and, to a lesser but growing extent, avoiding taxes in foreign jurisdictions.

The State and its agencies have been too slow to react to this change. Moreover, they appear to have failed to see that it is no longer an adequate response to charges of Ireland being a tax haven to say that the State is not technically in breach of existing global tax rules.

Irish political leaders, up to and including the Taoiseach, have in recent days been on the back foot in their defence of Ireland’s corporation tax regime. That in itself is bad – the old saw in politics that when you are explaining you are losing is truer still for small countries facing hostile global public opinion and much more powerful state counterparts.

One sign this week of how the debate has evolved globally was how US Senator John McCain's comments on Tuesday at the senate committee grilling of Apple Corp executives contrasted with views expressed five years ago. While running in the 2008 presidential election campaign he approvingly cited Ireland's low corporation tax rate.

This week he was anything but approving when discussing Apple’s accounting practices on this island.

The large and growing number of cases of countries aggressively clamping down on multi-jurisdictional evasion are likely to be a foretaste of what is to come on putting a stop to avoidance.

Examples of the former abound. In Europe, Austria, Lichtenstein, Luxembourg and Switzerland had for many decades facilitated tax dodging via their banking systems. That has changed more in the past five years than in the previous five decades as unprecedented pressure has been brought to bear on these countries.

In sheer scale, Switzerland has traditionally been among the biggest global player in secreting money away from taxmen around the world. But that is changing fast as the Alpine state has been forced to overhaul its banking rules.

Change has come about because the US, among others, has lent so heavily and so unrelentingly on Switzerland in recent years. This month alone one of the oldest Swiss banks has been forced to close after a US court slapped a $58 million fine on it for assisting American citizens evade tax.

Other big countries have become just as aggressive. In 2008-09 Germany deployed its spies to infiltrate a bank in Liechtenstein and extract names of German citizens with undeclared accounts in one of the principality's banks.

This was unprecedented. Traditionally James Bond types in democracies work on hard security matters involving unfriendly foreign governments and terrorist organisations. It is indicative of the way states see their national security interests changing that they will use espionage to prevent their citizens dodging taxes in friendly foreign countries.

In an age of austerity, the aggressive clamp down on (illegal) tax evasion is likely to be mirrored in the closing of (legal) tax avoidance loopholes.

For Ireland and Apple to claim that the mechanisms the latter used for tax management have been in place for 30 years is beside the point. The world is changing. What was deemed acceptable in the past is becoming unacceptable.

To protect Ireland’s foreign investment model over the long term, the Government must be – and must be seen to be – more proactive in closing corporate tax avoidance loopholes. If that does not happen in a targeted fashion by the Irish authorities, other actors elsewhere may force changes that could lead to a shrinking of the multinational sector with potentially enormous damage to Ireland’s prosperity.