The treaty to sever the Union divided the republican movement into anti-Treaty (who wanted to fight on until an Irish Republic was achieved) and pro-Treaty supporters (who accepted the Free State as a first step towards full independence and unity). Between 1922 and 1923 both sides fought the bloody Irish Civil War. The new Irish Free State government defeated the anti-Treaty remnant of the Irish Republican Army, imposing multiple executions. This division among nationalists still colours Irish politics today, specifically between the two leading Irish political parties, Fianna Fail and Fine Gael.
The new Irish Free State (1922–37) existed against the backdrop of the growth of dictatorships in mainland Europe and a major world economic downturn in 1929. In contrast with many contemporary European states it remained a democracy. Testament to this came when the losing faction in the Irish civil war, Eamon de Valera's Fianna Fail, was able to take power peacefully by winning the 1932 general election. Nevertheless, until the mid-1930s, considerable parts of Irish society saw the Free State through the prism of the civil war, as a repressive, British-imposed state. It was only the peaceful change of government in 1932 that signalled the final acceptance of the Free State on their part. In contrast to many other states in the period, the Free State remained financially solvent as a result of low government expenditure, despite the Economic War with Britain. However, unemployment and emigration were high. The population declined to a low of 2.7 million recorded in the 1961 census.
The Roman Catholic Church had a powerful influence over the Irish state for much of its history. The clergy's influence meant that the Irish state had very conservative social policies, forbidding, for example, divorce, contraception, abortion, pornography as well as encouraging the censoring and banning of many books and films. In addition the Church largely controlled the State's hospitals, schools and remained the largest provider of many other social services.
With the partition of Ireland in 1922, 92.6% of the Free State's population were Catholic while 7.4% were Protestant. By the 1960s the Protestant population had fallen by half. Although emigration was high among all the population, due to a lack of economic opportunity, the rate of Protestant emigration was disproportionate in this period. Many Protestants left the country in the early 1920s, either because they felt unwelcome in a predominantly Catholic and nationalist state, because they were afraid due to the burning of Protestant homes (particularly of the old landed class) by republicans during the civil war, because they regarded themselves as British and did not wish to live in an independent Irish state, or because of the economic disruption caused by the recent violence. The Catholic Church had also issued a decree, known as Ne Temere, whereby the children of marriages between Catholics and Protestants had to be brought up as Catholics. From 1945, the emigration rate of Protestants fell and they became less likely to emigrate than Catholics - indicating their integration into the life of the Irish State.
President John F. Kennedy in motorcade in Cork on June 27, 1963
In 1937 a new Constitution re-established the state as Ireland (or Eire in Irish). The state remained neutral throughout World War II (see Irish neutrality), which saved it from much of the horrors of the war, although tens of thousands volunteered to serve in the British forces. Ireland was also impacted by food rationing, and coal shortages; peat production became a priority during this time. Though nominally neutral, recent studies have suggested a far greater level of involvement by the South with the Allies than was realised, with D Day's date set on the basis of secret weather information on Atlantic storms supplied by Ireland. For more detail on 1939–45, see main article The Emergency.
In 1949 the state was formally declared a republic and it left the British Commonwealth.
In the 1960s, Ireland underwent a major economic change under reforming Taoiseach (prime minister) Sean Lemass and Secretary of the Department of Finance T.K. Whitaker, who produced a series of economic plans. Free second-level education was introduced by Donogh O'Malley as Minister for Education in 1968. From the early 1960s, Ireland sought admission to the European Economic Community but, because 90% of exports were to the United Kingdom market, it did not do so until the UK did, in 1973.
Global economic problems in the 1970s, augmented by a set of misjudged economic policies followed by governments, including that of Taoiseach Jack Lynch, caused the Irish economy to stagnate. The Troubles in Northern Ireland discouraged foreign investment. Devaluation was enabled when the Irish Pound, or Punt, was established as a separate currency in 1979, breaking the link with the UK's sterling. However, economic reforms in the late 1980s, helped by investment from the European Community, led to the emergence of one of the world's highest economic growth rates, with mass immigration (particularly of people from Asia and Eastern Europe) as a feature of the late 1990s. This period came to be known as the Celtic Tiger and was focused on as a model for economic development in the former Eastern Bloc states, which entered the European Union in the early 2000s. Property values had risen by a factor of between four and ten between 1993 and 2006, in part fuelling the boom.
Irish society adopted relatively liberal social policies during this period. Divorce was legalised, homosexuality decriminalised, and abortion in limited cases was allowed by the Irish Supreme Court in the X Case legal judgement. Major scandals in the Roman Catholic Church, both sexual and financial, coincided with a widespread decline in religious practice, with weekly attendance at Roman Catholic Mass dropping by half in twenty years. A series of tribunals set up from the 1990s have investigated alleged malpractices by politicians, the Catholic clergy, judges, hospitals and the Gardai (police).