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Ireland Financial Crisis Essay

1209 words - 5 pages

Ireland Financial Crisis

Introduction of Ireland Financial Crisis 怡萱 The Impacts of the Crisis e pacts o t e C s s Relief Program  Relief Program Unified European Bonds Conclusion 婉婷 軒敏 佩宜

y •Economy Boom •Investors jump in the  markets •Real estate market  was thriving 

2008

EU carried out  Low Interest Rate policy EU carried out “Low Interest Rate” policy

Ireland was full of “Cheap Fund”
Government tried to  Promote Real Estate Government tried to “Promote Real Estate”   The bank lend money to people who  want to buy house with low rate 

The real estate market thrived rapidly Th l t t k t th i d idl

•Real Estate market declined •Irish banks could not retrieve ...view middle of the document...

Panic in the bond market  is very contagious.
Yield 

Market confidence

Finance cost

Good

Panic in the bond market   is very contagious.

Bad
Panic in the bond market   is very contagious.

Tight  Fiscal Policy
Decrease the government budget deficit g g →Increase market confidence →Decline the economy growth  →Many people are unemployed

Relief Program Relief Program
廖軒敏

Offered by the European Union, European  Central Bank and the IMF. (International Monetary Fund) support a clear economic and financial  pp policy path for Ireland.

the United Kingdom, Sweden and Denmark  who have expressed their willingness to offer  p g bilateral assistance. 

Private sector creditors will bear the cost of  the relief program. the relief program

The €85 billion
banking  g sector 41% finance 59%

Return Irish economy y

Relief  program

Bank  B k system

Fiscal  Fi l policy

bank restructuring and reorganization  b k t t i d i ti fiscal policy and structural reform p y

Bank Restructuring and Reorganization Bank Restructuring and Reorganization 
Layoff  reorganization of the banking sector reorganization of the banking sector Reduce the expense Save more money Return Irish economy y

Relief  program

Bank  B k system

Fiscal  Fi l policy

Bank restructuring and reorganization  B k t t i d i ti Fiscal policy and Structural reform p y

Fiscal policy and Structural reform Fiscal policy and Structural reform
Taxation T ti − An increase in the carbon tax − Excise increases the producer or seller pays the tax h d ll h recover the tax by raising the price y g p the consumer buys it

Program Expenditure − Reduction of Social Welfare Reduction of Social Welfare

Public Service Costs Public Service Costs − Reduction of public service costs − a 10% pay reduction

Other − Reduce other program expenditure and Reduce other program expenditure and  public capital investment 

Labor market adjustment − Reduce the Minimum wage

Bank  Bank System

Ret rn Return  Irish  Irish economy
Fiscal  policy

the Government agree  the relief program th li f

What about the impact  on public? bli ?

Negative impact on public Negative impact on public
Tax increase Reduction of social welfare Reduction of social welfare The tight policy Opportunities of job decrease Unemployment increases Unemployment increases An increase in emigrant

students are leaving to study or work abroad  g y because of high tuition fees, but they’re also ...

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