What happened to Ireland's economy?

[W.E.B. Du Bois]

I remember reading a few years ago that Ireland had revolutionized its economy and was one of the fastest, if not the fastest, growing economies in Europe. Now they need a bailout and their debt is 1/3 the size of their economy. Where did they go wrong? Was the housing bubble and the derivatives market not only a US problem but a problem that was occurring in the rest of the world as well?

http://www.bbc.co.uk/news/business-11750676

Ireland 'in preliminary talks with EU on bailout'

The Republic of Ireland is in preliminary talks with EU officials for financial support, the BBC has learned. It is now no longer a matter of whether but when the Irish government formally approaches the European Financial Stability Fund (EFSF) for a bailout. The provisional estimate for EFSF loans is believed to lie between 60bn and 80bn euros ($82-110bn; £51-68bn).
....
Since 2008, Ireland has suffered the worst property collapse of all developed economies, with house values falling between 50% and 60%. Our correspondent says the Irish government has also all but nationalised the country's banking system, which had lent recklessly at an estimated cost of 40bn to 50bn euros.

The country has promised the EU it will bring its underlying deficit down from 12% of economic output to 3% by 2014. Its current deficit is an unprecedented 32% of gross domestic product, if the one-off cost of bad debts in the Irish banking system is included. The Irish government, which has a flimsy majority in parliament, is set to publish another draconian budget on 7 December, which will make spending cuts or tax rises totalling 6bn euros, and aims to bring the deficit down to between 9.5-9.75% next year, he adds.

[Mike]

It seems pretty logical that our mistakes would be imitated in other countries when things seemed to be going so well for us for so many years.

[Random thinker]

It's extremely sad. For many years Ireland (the republic) had a pretty poor economy, it was a largely agricultural economy and frankly it was run by the Catholic Church. I lived there as a child and spent time there in my teen years (family connections) and I recall it well, I lived not far from Dublin but in a rural area. When I read about the Celtic Tiger economy I was surprised but my relations weren't at all taken in, to them it was illusory. It seems they were right.

[Mike]

It's extremely sad. For many years Ireland (the republic) had a pretty poor economy, it was a largely agricultural economy and frankly it was run by the Catholic Church. I lived there as a child and spent time there in my teen years (family connections) and I recall it well, I lived not far from Dublin but in a rural area. When I read about the Celtic Tiger economy I was surprised but my relations weren't at all taken in, to them it was illusory. It seems they were right.

It would seem that your relations had a perspective that enabled them to see things you might not have readily observed. I have been struck time-and-time again by remarks from people I have known over the years who actually lived through the Great Depression and whose resulting paradigm gave them a very different interpretation of events during the last 50 years.

[chipper]

Have contacted the admin about problems with posting. Attempting to post.....successful.

[Voland]

I remember reading a few years ago that Ireland had revolutionized its economy and was one of the fastest, if not the fastest, growing economies in Europe. Now they need a bailout and their debt is 1/3 the size of their economy. Where did they go wrong? Was the housing bubble and the derivatives market not only a US problem but a problem that was occurring in the rest of the world as well?

http://www.bbc.co.uk/news/business-11750676

Well, the irish economy consisted mainly of potatoe fields, fishing boats and tourism less than thirty years ago ( northern Ireland was a different story, especially Belfast has been heavily industrialised for over a century). When Ireland became a member of the EU it was one of the poorest economies on the continent, but through clever use of EU subsidies and a low tax policy designed to attract foreign companies ( especially from english speaking non-EU countries) Ireland grew at amazing speed. But the basement wasn´t solid. Ireland has never developed a manufacturing sector of its own worth mentioning, has instead attracted businesses from other nations for having the lowest taxes, and a banking oversight was virtually non-existant ( that is why irish banks sit on a shitload of toxic debt and almost sank the entire economy). Additionally comes a housing bubble crisis. But probably the crisis now simply exposes the shaky foundations of Irelands economy but ultimately also holds a chance for the country. If they couldn´t count on EU solidarity their situation would be much worse.
Irish public debt is over 100 % of its BIP by the way, what you are talking about is the deficit ( the EU permits 3 % actually ).