The Crash

2008 - 2013: A property boom ended, the state guaranteed the banks, and Ireland lost control of its own budget for three years.

The Celtic Tiger had stopped being about exports and software some years before it ended. By the mid 2000s it was about property: building it, selling it, and borrowing enormous sums from European banks in order to lend them to people buying it.

In September 2008, with the banks days from running out of money, the government guaranteed them. Not just depositors but effectively the whole liability of the Irish banking system, put on the shoulders of the state in a single night. The decision is still argued about. What is not argued about is that the liabilities turned out to be far larger than anyone in the room believed.

The state could not carry it. On 27 November 2010 the government applied for assistance from the European Commission, the European Central Bank and the IMF, the three together known as the Troika. The package came to about 85 billion euro, of which some 67.5 billion was borrowed from outside. The conditions were severe: budget after budget of spending cuts and tax rises, set out in a programme that officials from Frankfurt and Washington arrived to review every few months.

Unemployment went above fifteen per cent by 2011. Emigration returned, this time taking graduates to Canada and Australia. Ireland left the programme on 15 December 2013, the first euro zone country to do so, and the recovery that followed was real and very unevenly shared.