Throughout this document I will be examining the state of the Irish Economy and exploring the policy instruments implemented by the government to achieve the goals and targets which have been set. I will be discussing the Irish Bailout and using economic indicators such as Employment, Growth Trade to strengthen my arguments. I will also be assessing and analysing Ireland’s current performance whilst giving my own views on the Governments policy prospects for the future and how I feel they should go about restabilising the economy.
When trying to give an account of the Irish economy we cannot overlook the EU/IMF bailout of 2010.
Following the collapse of the housing market in 2008 prices of residential properties fell by 47% from their peak in September 2007 to December 2011 (CSO).According to (Garvey, G 2010) In 2007,construction output peaked at just over €38bn.This represented an astonishing 24% of total economic output for that year. By comparison, the EU average was just over 12%. The output in construction soared and so too did employment. One in seven jobs in Ireland were in construction by 2007 and this lead to an economic unbalance, this imbalance proved to be unsustainable, banks made huge loans to property developers and when the construction boom came to a halt the same banks were close to being wiped out by the bad debts incurred. This meant they would have to be recapitalized by the Government. Having to recapitalize the banks nearly bankrupt the government finances meaning the Government were forced to seek a bailout worth €85 billion from the Member States of the European Union through the European Financial Stability Fund and the European Financial Stability Mechanism along with bilateral loans from the UK, Sweden and Denmark and the International Monetary Fund’s Extended Fund Facility on the basis of specified conditions.(REF FIX MY TAX) The State fronted €17½ billion of the total 85billion which came from...