Ireland needs about 85billion Euros (S$145B) to stay afloat. This figure is massive for its population of 4.4 million people. It is more than Singapore's sovereign wealth (GIC + Temasek) which took 40 years of "squeezing the people" to buildup.....so you can imagine how long the Irish people will be squeezed by the IMF. The problems that Ireland faces today cannot even be imagined a few years back when Ireland was called the Celtic Tiger. The term "tiger" seems to be jinxed - 14 years ago, another group of countries known as Asian Tigers were caught up in what became the Asian Crisis which ended with a few of them (Thailand, S. Korea) going to the IMF for aid. However, the Asian Crisis seems to be miniscule now compared with the problems faced by some of the European countries. Thailand, for example, needed "only" US$17B which it repaid within 3 years.
Ireland as the Celtic Tiger [Wiki Link]had a fast growing economy that was envied . Its growth rate of 6-11% in the mid 90s to 2006 elevated Ireland from being one of the poorest countries to the wealthiest in Europe within a decade. During that period, the technocrats running Ireland were widely praised for good sound economic policies that attracted multinationals such as Microsoft, Dell and Intel through subsidies and co-investment by state agencies. A few problems that emerged from Ireland's rapid economic growth were "the growing consumerism during the boom years eroded the country's culture with the adoption of American capitalist ideals" (ref: Wikipedia). and rising income inequality - Ireland is the 2nd most unequal country in Europe. The problem that got Ireland into is current economic mess is the rise of property prices ...i.e. the housing bubble.
Housing prices in Ireland peaked in 2006 after about a decade of steady rise. Prices were steady in 2007 and started to fall in 2008-2009. When price of property fell, banks which made big loans to property buyers and developers became insolvent and needed to be rescued (here's a good report on Ireland's banking crisis : Link). When I go through various reports and articles about the housing bubble in Ireland one fact that struck me was the speculators and developers in Ireland became very confident that prices would keep rising because Ireland had an open door policy to attract immigrants from Eastern European countries. By 2006, the foreign born population in Ireland reached 10% and developers confident that they will keep coming and demand will keep rising borrowed heavily to buy land.
This is what "Irish housing bubble" looked like in the form of a chart (source wikipedia) :
I looked at the above chart for a while and realised something:
There was no period in the Irish housing bubble when prices rose as rapidly as they did in Singapore in the past 2-3 years when housing prices rose by more than 70%. For a long time, the PAP govt denied that we have a housing bubble. In Aug 2010, when the govt finally decided to implement cooling measures after Singaporeans expressed concerns about property prices for more than a year, Mr. Mah said this:“We think that if we do nothing, there’s going to be a bubble. And when the bubble bursts – not if – there will be severe implications for individuals as well as for the economy as a whole,” said Mr Mah, Aug 2010.
Prior to that, Minister Mah spent much of his time telling ordinary Singaporeans that HDB flats were still affordable and so on. Well, I think we already have a bubble and when it bursts, there will be severe implications for individuals who took up big loans to purchase a home. There are many lessons from other countries (US, Spain, Ireland, UK etc) that tells us that we should have acted sooner and govts should be more proactive when tackling such problems. Minister Mah implemented the BTO scheme which under-supplied the public housing market as the number of immigrants coming to Singapore rose. Good economic times don't last forever and when bad times comes, it will become clearer to everyone what should have been done.