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Abstract

Despite Ireland’s status as the first EU country to receive a bailout, Ireland appears to be bouncing back extremely well from the ongoing financial crisis in Europe and the EU. Looking at recent Irish economic statistics it begs the question whether the government’s complete guarantee of all Irish debts was the best response. Ireland’s financial crisis seemed quite similar to America’s: for both the root causes are freely lending for real estate and property. The responses however, were very different. While America let Lehman Brothers fail and only provided a partial guarantee to its banks, Ireland provided a complete guarantee to all debt-holders. Yet as of late, Ireland’s unemployment rate has fallen below the EU average, the growth rate of the economy in 2015 was a surprising 5.2% and may be the fastest growing economy in the EU at the moment. Using an analysis of the Irish government’s response to the crisis this paper investigates why Ireland’s complete guarantee, without traditional Emergency Liquidity Assistance funds, became the best move for the country.

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©2016 Nia Gillenwater

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This work is licensed under a Creative Commons Attribution 4.0 License.

 

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