The joke doing the rounds at the beginning of the crisis, before Ireland blew up, was, what's the difference between Iceland and Ireland? The answer was, one letter and six months. The joke, it turned out, was a prophecy. Ireland was discussed in chapter 3, and it was noted then that between 1994 and 2007 Irish GDP grew much more rapidly than in the 1980s and 1990s. During this boom period, when cheap money was abundant in global markets, Ireland's banking sector also grew rapidly, and on the back of the credit bubble grew a housing bubble. When the bubble popped in 2008, the Irish government issued a blanket guarantee to its banks and soon after gave five and a half billion euros to three banks: Anglo Irish bank, Allied Irish Bank, and Bank of Ireland. Unfortunately, since the assets of these banks were little more than dead real-estate loans, this was just throwing good money after bad.

Mark Blyth, Austerity, loc. 631