Here's The Story Behind The Irish Crisis Everyone's Freaking Out About Again


While the PIIGS have largely been ignored over the past few weeks, they have resurfaced as a result of further concerns about the Irish banking system and economy.

It’s been rumoured that the ECB had to step in and buy Irish debt in an effort to shore up the country’s fiscal position. Ireland’s borrowing costs are rising as the country seeks more cash to contribute to its banking bailout.

But the story of Ireland’s debt crisis is much longer than this, and mimics that of the U.S.

The Celtic Tiger Stops Roaring

The Celtic Tiger was the phrase most associated with Ireland since the 1990s, describing its dramatic growth from one of Europe's poorest states to one of its richest.

The boom was based upon some solid fundamentals, but also a property and credit boom similar to the U.S.

Property Market Collapse

Ireland's property boom was at the heart of the Celtic Tiger phenomenon, and when it bust it brought much of the previous decade's economic growth with it, including several of the country's biggest banks.

Dublin: Boom To Bust

Dublin saw itself fall from Dubai on the Liffey levels back to Earth as massive projects like the 'U2 Tower' were canceled.

Photo: Overseas Property Mall

Recapitalization of Many Irish Banks

Ireland had to recapitalize its banking sector as a result of bad loans and property deals on their books. The consequences are still being felt, and the National Asset Management Agency is continuing to funnel money into the system.

Anglo-Irish Bank

Status: State Owned

Current Cost to Irish State: €12.3 Billion

The Irish state's commitment to Anglo-Irish bank looks likely to be a 10 year affair.

Bank of Ireland

Status: State supported

Current Cost to Irish State: State continues to own €1.8 billion in shares

The Bank of Ireland intends to move away from government support in the next three years.

Allied Irish Bank

Status: State sponsored (State owns 18.6%)

Current Cost to Irish State: €3.5 billion in government recapitalization

Allied Irish Bank is currently attempting to sell off its Polish division in an effort to raise capital.

Irish Depression

Ireland fell officially into a depression in 2009, with at least a 10% drop in GDP from its previous heights.

Ireland left its recession only in June of 2010.

Bulldozing Vacant Homes

The National Asset Management Agency intends to buy up large quantities of finished and unfinished sites and bulldoze them to stabilise demand in the property marketplace.

Photo: Ireland After NAMA

The Irish Austerity Budget

The Irish austerity budget made severe cuts to public services across Ireland in an effort to reduce the deficit as a percentage of GDP and increase confidence in Irish sovereign debt. Welfare payments were slashed 4.1% and the total budget was cut 8.8%.

Picture: The Gulf Scream

Now Check Out How The U.S. Government Would Look Under An Austerity Budget

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