Ireland prior to the depression was held up by "free market" enthusiasts as a shining success story of neoliberal policies. But when the crisis hit, Ireland decided to use public money via bond sales to cover the bad debts that would have put Ireland's large banks underwater. That is what made their debt load a sovereign debt crisis.
The alternative would have been the one Iceland used, which is to let the banks go bankrupt, which means the stockholders would lose their investments in bankrupt institutions, and have the government put them through a bankruptcy process during which the bad debts would be worked out, written down, etc. And then set the banks back up as going concerns. It worked out much better for Iceland.
Aljazeera's People & Power show featured an analysis of the Irish situation in Collapse of the Celtic Tiger YouTube date 01/19/2012:
Tags: ireland
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