The Irish Financial Crisis Was Both Predictable and Preventable. to What Extent Do You Agree with This Statement?

1128 Words Aug 23rd, 2013 5 Pages
Irish Financial Crisis has attracted much attention recently. Driven by booms in property and lending, it left the society with massive issues such as high unemployment, insolvent banks and huge government deficit(Kelly, 2010, P1). There are many debate surrounding on whether the crisis could be predicted and prevented. This essay will attempt to demonstrate that Irish Financial Crisis was both predictable and preventable. It will first state that Irish Financial Crisis was predictable through the observation of its abnormal economic growth mode and the soared property prices. Then it will turn to argue that the crisis was preventable. This essay will try to analyse theoretical and practical facts were provided as experience to prevent the …show more content…
Therefore, it clear that the soared property prices was potential crisis and it could be concluded that people could predicted Irish economy crisis though the above analysis about the uncommon growth of economy and the dramatical rise of property prices.

Moreover, it has been argue that the impact of euro membership on Ireland leads to Irish Financial Crisis was unlikely to be prevented. According to Health (2010) Ireland’s membership of the European Union(the EU) with the dysfunctional single currency, which should have never have joined. Following Ireland's economic fortunes has been something of a rollercoaster ride over one decade that Ireland have been part of the EU. The extreme low interest rate( just 2.25 per cent) and idiotic lending policy( mortgage lending from 3 times average earnings rise to 17 times average earnings) which formulated by the the EU, caused the height of a property, economic and mortgage boom become inevitable. Therefore, it could be said that the membership of the European Union led to Irish Financial Crisis which could not be prevented.

However, Ireland’s crisis is not only the fault of the euro, Irish government also have responsibility. According to Blackburn (2010) the pattern of Ireland’s crisis was remarkably similar to Britain’s but, the UK does not totally follow the euro’s one-size-fits-all interest rates and monetary policy and, more importantly, it has powerful surveillance of banking

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