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Ireland's Hard Landing

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From 1995 to 2000, Ireland shocked the world and transformed from an underdeveloped nation into an example of economic and developmental success. This period, known as the Celtic Tiger, provided the Irish people with a sense of wealth on par or greater than other developed nation around the world. The government did not want to stop this expansion of the economy and therefore allowed for a deregulated banking industry to promote a real estate bubble. The construction of new houses expanded at an amazing rate during the early 2000s and supply quickly outpaced demand. Irish banks were extremely exposed to the Irish real estate boom due to their lending practices. Therefore, when the inevitable occurred and house prices began to drop, the banks soon found themselves in a crisis. The Irish government’s decision to save the banks from collapse resulted in a large deficit that made borrowing too expensive, and required the nation to accept a multi-year lending program from the EU and IMF. This program included austerity measures that burdened the Irish populace with taxes and cuts in services. The rise and fall of Ireland exemplifies the dangers that economic bubbles can have on a country. An Irish government report published after the crisis depicts one of the lessons learned from the economic collapse: “The Irish crisis reaffirms the principle that rigorous discipline in fiscal policy and financial regulation is essential if membership of a currency union is to be compatible with macroeconomic and banking stability” (Lane). In essence, political actions and decisions combined with external factors and a flawed banking system created a disastrous financial collapse in Ireland.
The speedy growth of the Irish economy quickly grew into a...

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...etter regulated.

Works Cited

"The Eighth Austerity Budget." n.d.: n. pag. The Economist. The Economist Newspaper, 19 Oct. 2013. Web. 5 Dec. 2013.
"Ireland's Crash: After the Race." The Economist n.d.: n. pag. The Economist. The Economist Newspaper, 17 Feb. 2011. Web. 05 Dec. 2013.
Krugman, Paul. "Erin Go Broke." New York Times. N.p., 19 Apr. 2009. Web. 05 Dec. 2013.
Lane, Phillip. "The Irish Crisis." The World Financial Review (2011): n. pag. 25 Sept. 2011. Web. 5 Dec. 2013.
Lewis, Michael. "When Irish Eyes Are Crying." Vanity Fair. Vanity Fair Magazine, Mar. 2011. Web. 05 Dec. 2013.
Whelan, Karl. "Ireland’s Economic Crisis The Good, the Bad and the Ugly." UCD Working Papers Series (2013): n. pag. July 2013. Web. 05 Dec. 2013.
Woods, Maria, and Siobhán O’Connell. Ireland’s Financial Crisis: A Comparative Context. Rep. N.p.: Central Bank of Ireland, 2012. Print.
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