Ireland on 13 October 2013 announced that in December 2013 it would become the first member of the Euro zone, to exit an International bail -out programme. From then on, the Republic will borrow the money it needs, from the financial markets rather than relying on the loans, it was granted by Euro zone agencies and the IMF.
Ireland followed a four-year austerity programme that was sparked when its property bubble burst, tipping banks into financial crisis. Ireland can become an example of how austerity and reform policies can return crisis-stricken member states’ economies to health.
The Eurozone crisis (often referred to as the Euro crisis) is an ongoing crisis which has been affecting the countries of the Eurozone since late 2009. It is a sovereign debt crisis as well as a banking crisis and a growth and competitiveness crisis.
The Eurozone crisis took place because of the following factors, including the globalisation of finance; easy credit conditions during the 2002–2008 period that encouraged high-risk lending and borrowing practices; the financial crisis of 2007–08; international trade imbalances; real estate bubbles that have since burst; the Great Recession of 2008–2012; fiscal policy choices related to government revenues and expenses; and approaches used by nations to bail out troubled banking industries and private bondholders, assuming private debt burdens or socialising losses.
The Irish sovereign debt crisis was based on the state guaranteeing the six main Irish-based banks who had financed a property bubble. Irish banks had lost an estimated 100 billion euros, much of it related to defaulted loans to property developers and homeowners made in the midst of the property bubble, which burst around 2007. The economy collapsed during 2008. Since government debt increased rapidly it was clear that the Government would have to seek assistance from the EU and IMF which resulted in a billion euros bailout agreement of 29 November 2010.