NOTE: please correct any information below if wrong because I did not verify my sources and I'm just writing what I remember on top of my head.
Ireland has less that 5 million inhabitants. Irish debt does NOT come from government spending out of control. It has two main sources:
1. Toxic derivatives. Anglo Irish Bank was mainly used as a dump for those. It was bailed out by the government (which was in turn bailed out by EU) then it went bust.
Anglo Irish Bank was only serving the financial sectot not the public. Rumour has it that the German-led EU posed rescue of Anglo Irish Bank as a condition to the Irish government for the EU bailout. Bad mouths say it was because German banks had purchased debt from Anglo Irish that they needed to wash their hands off before closing it down.
As opposed to going to jail, former Anglo Irish Bank managers got a rich performance bonus.
2. Unpaid mortgages. At the peak of the housing bubble in 2007 real estate prices were 2 times and half what they are now. There are 90 thousand homes in Ireland whose mortgage hasn't been paid for more than 90 days. The banks are legally entitled to repossession - yet there are only few houses for sale on the market. Rumour has it that banks are not willing to sell the properties at a loss because it is more convenient to them to try and get another bailout - hoping they get third-time-lucky, who knows.
In regards to banks' liquidity situation in Ireland - rumour has it that Bank of Ireland is fine but Allied Irish Banks (no. 2) is in deep shit.
Meanwhile most Irish top bank managers are still being paid generous bonuses for having been able to negotiate bailouts with their friends at the government.
I believe Ireland is going to be the next testing ground for the Cyprus idea. The Irish Times article is already starting the "lesser evil" sweet-talk-bullshit.
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