The Irish economy started
to grow at extraordinary rates during the 1990s, the growth rates were unheard
of in a developed Western nation. As the level of growth was of the same level
as the tiger economies in Asia, this led to Ireland being dubbed the Celtic
Tiger.
The Celtic Tiger began to
wane at the start of the 00s but instead of Irish growth collapsing, instead it
continued to rise at annual rates of on average 5% every year until 2008 largely because of a property fueled boom. Ireland experienced huge growth in wealth up
until the financial crisis of 2008. The subsequent collapse of the Irish
property market turned out to be one of the worst in history. With Residential
values plummeting by up to 60% and Commercial values dropping by up to 90% in
some cases, the values are still falling.
A normal property crash has
on average falls of roughly 30%, so even if the Irish banks had been run in a
prudent manner, (which they were not) they still would not have been able to
meet the loan losses on their balance sheet.
In my blog I want to
discuss what happened in more detail, firstly how did it happen and then who
should be blamed, is it too easy to just blame people for being greedy, from
bankers to the public and then onto politicians. Was it really just their fault or
could all of that just be a sideshow to the real problem, namely the currency
union, the Euro?
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