2008–2009 Irish financial crisis - AbsoluteAstronomy.com

This is an article detailing Ireland's current economic recession and the impact it has had on that country. For the series of banking scandals which the country is currently experiencing, see 2008–2011 Irish banking crisis.

The 2008–2011 Irish financial crisis, which had stemmed from the financial crisis of 2008, is a major political and economic crisis

Financial crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these...

in Ireland

Republic of Ireland

Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...

that is partly responsible for the country falling into recession

Recession

In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...

for the first time since the 1980s. In September 2008, the Irish government

Irish Government

The Government of Ireland is the cabinet that exercises executive authority in Ireland.-Members of the Government:Membership of the Government is regulated fundamentally by the Constitution of Ireland. The Government is headed by a prime minister called the Taoiseach...

, made up of a Fianna Fáil

Fianna Fáil

Fianna Fáil – The Republican Party , more commonly known as Fianna Fáil is a centrist political party in the Republic of Ireland, founded on 23 March 1926. Fianna Fáil's name is traditionally translated into English as Soldiers of Destiny, although a more accurate rendition would be Warriors of Fál...

/Green Party

Green Party (Ireland)

The Green Party is a green political party in Ireland. It was founded as the Ecology Party of Ireland in 1981 by Dublin teacher Christopher Fettes. The party became the Green Alliance in 1983 and in 1987 was renamed to its current title in English...

coalition, officially announced the country had entered a recession, with a sharp rise in unemployment occurring in the following months. Ireland was the first state in the Eurozone

Eurozone

The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...

to enter recession as declared by the Central Statistics Office.

The numbers of people claiming unemployment benefit in Ireland rose to 326,000 in January 2009, the highest monthly level since records began in 1967. Amidst the crisis, which has coincided with a series of banking scandals, the ruling Fianna Fáil

Fianna Fáil

party fell to third place in an opinion poll conducted by The Irish Times
The Irish Times
The Irish Times is an Irish daily broadsheet newspaper launched on 29 March 1859. The editor is Kevin O'Sullivan who succeeded Geraldine Kennedy in 2011; the deputy editor is Paul O'Neill. The Irish Times is considered to be Ireland's newspaper of record, and is published every day except Sundays...

. The party placed behind Fine Gael

Fine Gael

Fine Gael is a centre-right to centrist political party in the Republic of Ireland. It is the single largest party in Ireland in the Oireachtas, in local government, and in terms of Members of the European Parliament. The party has a membership of over 35,000...

and Labour

Labour Party (Ireland)

The Labour Party is a social-democratic political party in the Republic of Ireland. The Labour Party was founded in 1912 in Clonmel, County Tipperary, by James Connolly, James Larkin and William X. O'Brien as the political wing of the Irish Trade Union Congress. Unlike the other main Irish...

, the latter rising above Fianna Fáil for the first time.

The weakening conditions drew 100,000 protesters onto the streets of Dublin on 21 February 2009, amidst further threats of protests and industrial action

Industrial action

Industrial action or job action refers collectively to any measure taken by trade unions or other organised labour meant to reduce productivity in a workplace. Quite often it is used and interpreted as a euphemism for strike, but the scope is much wider...

. The country's Irish Stock Exchange

Irish Stock Exchange

-History:The Irish Stock Exchange is Ireland's only stock exchange and has been in existence since 1793. It is an Irish private company limited by guarantee. It was first recognised by legislation in 1799 when the Irish Parliament passed the Stock Exchange Act...

(ISE) general index had reached a peak of 10,000 points briefly in April 2007, but by 24 February 2009 it stood at 1,987 points, a 14-year low. The last time it stood under the 2,000 level was the middle of 1995.

With the banks "guaranteed" and the National Asset Management Agency

National Asset Management Agency

The National Asset Management Agency is a body created by the Government of Ireland in late 2009. It is in response to the Irish financial crisis and the deflation of the Irish property bubble....

(NAMA) established, on the evening of 21 November 2010, the then Taoiseach Brian Cowen

Brian Cowen

Brian Cowen is a former Irish politician who served as Taoiseach of Ireland from 7 May 2008 to 9 March 2011. He was head of a coalition government led by Fianna Fáil which until 23 January 2011 had the support of the Green Party and independent TDs.Cowen was also leader of Fianna Fáil from 7 May...

confirmed on live television the intervention of the EU/IMF in Ireland's financial affairs. The Fianna Fáil/Green Party coalition collapsed within months and was replaced by a Fine Gael

Fine Gael

/Labour Party

Labour Party (Ireland)

coalition at the February 2011 general election.

Background and causes

The Irish economy

Economy of the Republic of Ireland

The economy of Ireland has transformed in recent years from an agricultural focus to a modern knowledge economy, focusing on services and high-tech industries and dependent on trade, industry and investment. In terms of GDP per capita, Ireland is ranked as one of the wealthiest countries in the...

expanded rapidly during the Celtic Tiger

Celtic Tiger

Celtic Tiger is a term used to describe the economy of Ireland during a period of rapid economic growth between 1995 and 2007. The expansion underwent a dramatic reversal from 2008, with GDP contracting by 14% and unemployment levels rising to 14% by 2010...

years (1997–2007) due to a low corporate tax rate, low ECB

European Central Bank

The European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...

interest rates, and other factors. This led to an expansion of credit and included a property bubble

Irish property bubble

The property bubble in the Republic of Ireland began in 2000 and peaked in 2006, as with many other western European countries, with a combination of increased speculative construction and rapidly rising prices....

which petered out in 2007. Irish banks, already over-exposed to the Irish property market, came under severe pressure in September 2008 due to the global financial crisis of 2007–2010.

Impact

The economy and government finances began to show signs of impending recession by mid-2008

. Subsequently, government deficits increased, many businesses closed and unemployment increased. The Irish Stock index (ISEQ) fell. Many immigrant workers left.

Anglo Irish Bank

Anglo Irish Bank was a bank based in Ireland with its headquarters in Dublin from 1964 to 2011. It went into wind-down mode after nationalisation in 2009....

was exposed to the Irish property bubble. A hidden loans controversy

Anglo Irish Bank hidden loans controversy

The Anglo Irish Bank hidden loans controversy began in the Republic of Ireland in December 2008 when the chairman of Anglo Irish Bank, Ireland's third largest bank, admitted he had hidden a total of €87 million in loans from the bank, triggering a series of incidents which led to the eventual...

in December 2008 led to a further drop in its share price. The ISEQ dropped to a 14-year low on 24 September 2009, probably triggered by the unexpected resignation of former Anglo Irish Bank director Anne Heraty

Anne Heraty

Anne Heraty is an Irish business woman. She is co-founder, major stake-holder and also CEO of CPL Resources Plc.-CPL:In 1989 Heraty and Keith O'Melly founded Computer Placement Ltd. a company placing people at IT companies that were starting to set up businesses in Ireland...

from the board of the Irish Stock Exchange

Irish Stock Exchange

the night before.

Growth and unemployment

The Irish economy entered severe recession in 2008.

Ireland entered into an economic depression

Depression (economics)

In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe downturn than a recession, which is seen by some economists as part of the modern business cycle....

in 2009. The Economic and Social Research Institute

Economic and Social Research Institute

The Economic and Social Research Institute is a think tank in Dublin, Ireland. Its research focuses on Ireland's economic and social development in order to inform policy-making and societal understanding....

predicted an economic contraction of 14% by 2010. In the first quarter in 2009, GDP was down 8.5% from the same quarter the previous year, and GNP

GNP

Gross National Product is the market value of all products and services produced in one year by labor and property supplied by the residents of a country...

down 12%. Unemployment is up 8.75% to 11.4%. The economy exited recession in the third quarter of 2009, with GDP growing by 0.3% in the quarter, but GNP continued to contract, by 1.4%..

Property market

Due to the ending of the bubble, the residential and commercial property markets went into a severe slump with both sales and property values collapsing.

Developers such as Liam Carroll

Liam Carroll

Liam Carroll is a property developer in Ireland whose Zoe Developments group became well known during the Celtic Tiger years of 1990s and 2000s for residential and commercial property construction projects. Carroll is known in business circles for his legendary thriftiness and is considered a...

began to fall behind on their loan repayments. Due to the financial crisis, banks such as ACC

ACC

ACC may refer to:-Business:* ACC Limited, Indian cement manufacturer* ACCBank, Ireland* American Campus Communities, private student housing provider* American Communications Corp, cabling company in San Diego...

pushed for their revenue recovery and requested liquidation

Liquidation

In law, liquidation is the process by which a company is brought to an end, and the assets and property of the company redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation...

of the development firms.

Emigration

The Central Statistics Office estimated that 34,500 people left the country from April 2009-2010, the largest net emigration since 1989. However, only 27,700 of these are Irish nationals, an increase of 12,400 since 2006. It's also notable that more people went somewhere other than the UK, EU or US, traditional destinations for Irish emigrants, than any other destination.

2008: Cowen administration, bank guarantee, rise of FEE, pensioners revolt

Following the May 2008 appointment of Brian Cowen

Brian Cowen

as Taoiseach

Taoiseach

The Taoiseach is the head of government or prime minister of Ireland. The Taoiseach is appointed by the President upon the nomination of Dáil Éireann, the lower house of the Oireachtas , and must, in order to remain in office, retain the support of a majority in the Dáil.The current Taoiseach is...

, the ruling Fianna Fáil

Fianna Fáil

party had been polling close to their 41% levels of the 2007 election but the party began to fall in the polls from September 2008. Their support fell to third place for the first time ever behind both leading opposition parties in a national opinion poll published in The Irish Times
The Irish Times
The Irish Times is an Irish daily broadsheet newspaper launched on 29 March 1859. The editor is Kevin O'Sullivan who succeeded Geraldine Kennedy in 2011; the deputy editor is Paul O'Neill. The Irish Times is considered to be Ireland's newspaper of record, and is published every day except Sundays...

on 13 February 2009, polling only 22%. A 27 February poll, indicated that only 10% of voters were satisfied with the Government's performance, that over 50% would like an immediate general election. They gained about 24% of the vote in the June 2009 local elections and continued to languish as the crisis intensified during the remainder of the year, reaching a new low of 17% support in September 2009. During the 2009/2010 period opposition calls for an early election intensified and some of their own TDs resigned from the party supporting the calls and reducing the Government majority to single digits. The Government was urged by the courts to hold a long-delayed Donegal South by-election. By December 2010, following the IMF intervention, their support reached a further record low of 13% and their coalition partners, the Green Party, announced that they would withdraw support from Government in January 2011 once the 2011 budget had been passed. The Government announced that an election would take place in Spring 2011 but the intended date had to be be brought forward to 25 February 2011 following a widely criticised cabinet reshuffle. Taoiseach Cowen was replaced as party leader by Micheal Martin

Micheál Martin

Micheál Martin is an Irish politician who has been leader of Fianna Fáil since January 2011. He is a Teachta Dála for the Cork South Central constituency...

. At the election, Fianna Fáil received 17% of the vote and their seats collapsed from 71 outgoing to a record low of 20. The Fine Gael and Labour opposition secured record seat gains but no overall majority and formed a coalition government.

Government emergency budget of July 2008

Ireland officially declared it was in a recession in September 2008. Prior to this declaration, the Irish government announced, on 3 September 2008, that it was to bring forward the 2009 government budget from its usual December date to 14 October 2008. In a statement, the government claimed that this was largely due to a decrease in the global economy. The budget, labelled "the toughest in many years", included a number of controversial measures such as a proposed income levy which was eventually restructured, and the withdrawal of previously promised HPV vaccine

HPV vaccine

The human papilloma virus vaccine prevents infection with certain species of human papillomavirus associated with the development of cervical cancer, genital warts, and some less common cancers...

s for schoolgirls. Other results of the budget included a new income levy being imposed on all workers above a specified threshold and the closure of a number of military barracks near the border with Northern Ireland

Northern Ireland

Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...

.

An unexpected public outcry was invoked over the proposed withdrawal of medical cards and the threatened return of university fees. A series of demonstrations ensued amongst teachers and farmers, whilst on 22 October 2008, at least 25,000 pensioners and students descended in solidarity on the Irish parliament at Leinster House

Leinster House

Leinster House is the name of the building housing the Oireachtas, the national parliament of Ireland.Leinster House was originally the ducal palace of the Dukes of Leinster. Since 1922, it is a complex of buildings, of which the former ducal palace is the core, which house Oireachtas Éireann, its...

, Kildare Street

Kildare Street

Kildare Street is a well-known street in Dublin, the capital city of Ireland close to the principal shopping area of Grafton Street and Dawson Street, to which it is joined by Molesworth Street. Some Irish government departments have their offices on this street but it is most famous for Leinster...

, Dublin. Some of the pensioners were even seen to cheer on the students as the protests passed each other on the streets of Dublin. Slogans such as "no cutbacks, no fees, no Fianna Fáil TD

Teachta Dála

A Teachta Dála , usually abbreviated as TD in English, is a member of Dáil Éireann, the lower house of the Oireachtas . It is the equivalent of terms such as "Member of Parliament" or "deputy" used in other states. The official translation of the term is "Deputy to the Dáil", though a more literal...

s" and "education is a right not a privilege" have since become commonplace in student protests against the government organised by the Union of Students in Ireland

Union of Students in Ireland

The Union of Students in Ireland is the national representative body for third-level students' unions in Ireland. The Union of Students in Ireland is the sole national representative body for students in Ireland but does not represent students from two of the seven Irish Universities, namely...

(USI) and the newly formed Free Education for Everyone

Free Education for Everyone

Free Education for Everyone is an Irish student campaign group which was set up in September 2008 in University College Dublin to fight the proposed re-introduction of university fees...

(FEE), as have puns on the then Minister for Education and Science

Minister for Education and Science (Ireland)

The Minister for Education and Skills is the senior minister at the Department of Education and Skills in the Government of Ireland.The current Minister for Education and Skills is Ruairi Quinn, TD...

Batt O'Keeffe

Bartholomew "Batt" O'Keeffe is a former Irish Fianna Fáil politician who served as a Teachta Dála and Senator from 1989 to 2011. He also served as Minister for Education and Science and Minister for Enterprise, Trade and Innovation .-Early and personal life:O'Keeffe was born in Cullen, County...

. Changes to education led to a ministerial meeting with three Church of Ireland

Church of Ireland

The Church of Ireland is an autonomous province of the Anglican Communion. The church operates in all parts of Ireland and is the second largest religious body on the island after the Roman Catholic Church...

bishops who were assured by O'Keeffe that religious instruction would be unaffected by the budget changes.

Rebellion within the ranks of the ruling coalition

Coalition

A coalition is a pact or treaty among individuals or groups, during which they cooperate in joint action, each in their own self-interest, joining forces together for a common cause. This alliance may be temporary or a matter of convenience. A coalition thus differs from a more formal covenant...

government led to a number of defections of disenchanted coalition members

Government of the 30th Dáil

The 30th Dáil was elected at the 2007 general election on 24 May 2007 and first met on 14 June when President Mary McAleese appointed Bertie Ahern as Taoiseach, on the nomination of Dáil Éireann...

. County Wicklow

County Wicklow

County Wicklow is a county in Ireland. It is part of the Mid-East Region and is also located in the province of Leinster. It is named after the town of Wicklow, which derives from the Old Norse name Víkingalág or Wykynlo. Wicklow County Council is the local authority for the county...

TD, Joe Behan

Joe Behan

Joe Behan is a former Irish independent politician. He served as a Teachta Dála for the Wicklow constituency from 2007 to 2011. He was elected as a Fianna Fáil TD at the 2007 general election....

resigned from the Fianna Fáil party in protests at the proposed medical card changes after suggesting that past taoisigh

Taoiseach

Éamon de Valera

Éamon de Valera was one of the dominant political figures in twentieth century Ireland, serving as head of government of the Irish Free State and head of government and head of state of Ireland...

and Seán Lemass

Seán Lemass

Seán Francis Lemass was one of the most prominent Irish politicians of the 20th century. He served as Taoiseach from 1959 until 1966....

"would be turning in their graves at the decisions made in the past week". Independent

Independent (politician)

In politics, an independent or non-party politician is an individual not affiliated to any political party. Independents may hold a centrist viewpoint between those of major political parties, a viewpoint more extreme than any major party, or they may have a viewpoint based on issues that they do...

Deputy Finian McGrath

Finian McGrath

Finian McGrath is an Irish independent politician. He has been a Teachta Dála for the Dublin North Central constituency since 2002.-Early and personal life:...

then threatened to withdraw his support for the government unless the plan to remove the overs 70s automatic right to a medical card was withdrawn completely. Taoiseach

Taoiseach

Brian Cowen

postponed a planned trip to China

People's Republic of China

China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...

, sending Minister for Education and Science

Minister for Education and Science (Ireland)

Batt O'Keeffe

ahead to lead the delegation. Behan, alongside McGrath and former government minister Jim McDaid

Jim McDaid

James "Jim" McDaid is a former Irish Fianna Fáil politician and medical doctor. He served as a Teachta Dála for the Donegal North East constituency from June 1989 until he resigned in November 2010.-Early life:...

, later voted against his former colleagues in two crucial Dáil

Dáil Éireann

Dáil Éireann is the lower house, but principal chamber, of the Oireachtas , which also includes the President of Ireland and Seanad Éireann . It is directly elected at least once in every five years under the system of proportional representation by means of the single transferable vote...

votes on medical cards and cancer vaccines. These defections reduced the Irish government's majority of twelve by one quarter.

A supplementary budget was delivered in April 2009 to address a fiscal shortfall of over €4.5 billion.

Bank guarantee

On 29 September 2008 the government issued an unlimited bank guarantee in favour of 6 banks that was to cost much more than the government estimated. It was approved at the time by the European Commission

European Commission

The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

. This was to result in the EU-IMF intervention in late 2010 (see below).

Comment by the American embassy

Despite the bank guarantee in September, by December 2008 the American ambassador was reporting to Washington that no clear plan was in place, after an interview with John McCarthy of the Irish Department of Finance

Department of Finance (Ireland)

The Department of Finance is a department of the Government of Ireland. It is led by the Minister for Finance and is assisted by one Minister of State....

and two other officials. McCarthy was quoted as saying that "forecasting anything in the current uncertain environment is almost impossible" and that the government could "only react given the fast pace of the downturn”. The interview was published in 2011 as a part of the wikileaks disclosures.

Sit-ins and strikes

On 5 January 2009, Waterford Wedgwood

Waterford Wedgwood

Waterford Wedgwood plc is the former holding entity for a group of companies headquartered in Ireland, which specialised in the manufacture of high quality china, porcelain and glass. The group was dominated by Tony O'Reilly and his immediate family, and the family of Mr. O'Reilly's second wife,...

entered receivership. On 30 January, workers at the Waterford Crystal

Waterford Crystal

Waterford Crystal is a trademark brand of crystal glassware, previously produced in Waterford, Ireland, though the factory there was shut down after the receivership of Waterford Wedgwood plc in early 2009...

plant in Kilbarry were told they would be losing their jobs. A statement issued by the receiver, Deloitte's David Carson, confirmed that, of the 670 employees, 480 of them would be laid off. The workers responded angrily to this unexpected decision and at least 100 of them began an unofficial sit-in in the visitors' gallery at the factory that night. They insisted they would refuse to leave until they had met with Carson. Following the revelations, there was a minor scuffle during which the main door to the visitors' centre was damaged. Local Sinn Féin

Sinn Féin

Sinn Féin is a left wing, Irish republican political party in Ireland. The name is Irish for "ourselves" or "we ourselves", although it is frequently mistranslated as "ourselves alone". Originating in the Sinn Féin organisation founded in 1905 by Arthur Griffith, it took its current form in 1970...

Councillor Joe Kelly

Joe Kelly

Joe Kelly may refer to:*Joe Kelly *Joe Kelly , comic book and animation writer*Joe Kelly , Formula One driver*Joe Kelly , jazz musician...

was amongst those who occupied the visitors' gallery. A meeting held the following day did little to resolve the conflict, with the sit-in continuing for almost two months until 22 March.

On 18 February 2009, 13,000 civil servants voted for industrial action over a proposed pension levy. They effected this action on 26 February.

Days earlier, as many as 120,000 people, had protested on the streets of Dublin on 21 February. This was followed by a further march through the capital by gardaí on 25 February and a lunch-time protest by 10,000 civil servants on 19 March 2009. This was followed by two separate taxi drivers' protests in Dublin on 20 March 2009.

Labour leader Eamon Gilmore has stated his belief that a national strike would serve the country no good. The strike was later called off.

National Asset Management Agency

In April 2009, the government proposed a National Asset Management Agency

National Asset Management Agency

The National Asset Management Agency is a body created by the Government of Ireland in late 2009. It is in response to the Irish financial crisis and the deflation of the Irish property bubble....

(NAMA) to take over large loans from the banks, enabling them to return to normal liquidity to assist in the economic recovery. NAMA's first appraisal was in September 2009, fortuitously timed just before the issue of the second one-year bank guarantee.

Increasing debt spiral

The costs of the bank rescues, NAMA and government deficits over the period look set to push Irish National Debt up to a ratio of 125% of GDP by 2015.
However, there have been a number of misleading estimates of debt statistics relating to the Irish financial crisis. Ireland, like Luxembourg, is home to a disproportionately large number of international financial services providers. Many statistical calculations include the debts of all banks located in Ireland without separating foreign owned banks from Irish banks. The liabilities of the Irish banks represent a figure equivalent to approximately 309% of GDP, the third highest in the EU.

Croke Park Agreement

Against a background of massive private sector layoffs and pay cuts, the Irish Government and Irish Public Sector unions, including IMPACT

Irish Municipal, Public and Civil Trade Union

The Irish Municipal, Public and Civil Trade Union is a trade union in the Republic of Ireland. It primarily organises workers in education, health, local government and the civil service...

, negotiated the Croke Park Agreement

Croke Park Agreement

The Croke Park Agreement is an agreement between the Irish Government and various public sector unions. It is named after Croke Park a large sporting area in Dublin where it was negotiated.-Background:The 2010 budget imposed pay cuts on public sector workers...

which provided for increased productivity, flexibility and savings from the public sector in exchange for no further pay cuts, and no lay offs. As of August 2011 there have been no compulsory layoffs in the Irish civil service despite the financial crisis.

EU-IMF intervention

In April 2010, following a marked increase in Irish 2-year bond yields, Ireland's NTMA

National Treasury Management Agency

The National Treasury Management Agency is the agency that manages the assets and liabilities of the Government of Ireland. It was established at the end of 1990 to borrow for the exchequer and manage the national debt...

state debt agency said that it had "no major refinancing obligations" in 2010. Its requirement for in 2010 was matched by a cash balance, and it remarked: "We're very comfortably circumstanced". On 18 May the NTMA tested the market and sold a €1.5 billion issue that was three times oversubscribed. By September 2010 the banks could not raise finance and the bank guarantee was renewed for a third year. This had a negative impact on Irish government bonds, government help for the banks rose to 32% of GDP, and so the government started negotiations with the ECB

European Central Bank

and the IMF

International Monetary Fund

The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

.

On the evening of 21 November 2010, the then Taoiseach

Taoiseach

Brian Cowen

confirmed that Ireland had formally requested financial support from the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

's European Financial Stability Facility

European Financial Stability Facility

The European Financial Stability Facility is a special purpose vehicle financed by members of the eurozone to combat the European sovereign debt crisis. It was agreed by the 27 member states of the European Union on 9 May 2010, aiming at preserving financial stability in Europe by providing...

(EFSF) and the International Monetary Fund

International Monetary Fund

(IMF), a request which was welcomed by the European Central Bank

European Central Bank

and EU finance ministers. The request was approved in principle by the finance ministers of the eurozone

Eurozone

countries in a telephone conference call. Details of the financial arrangement were not immediately agreed upon, and remained to be determined in the following weeks, though the loan was believed to be in the region of €100 billion, of which approximately €8 billion was expected to be provided by the United Kingdom.

Following criticism of the action, the Green Party

Green Party (Ireland)

leader John Gormley

John Gormley

John Gormley is an Irish politician. He was the leader of the Irish Green Party from 2007 to 2011, and was a Teachta Dála for the Dublin South East constituency from 1997 to 2011. He served as Minister for the Environment, Heritage and Local Government from 2007–11...

signalled that his party would seek a General Election in January, 2011, with the implicit threat being that they would pull out of Government; with the addition of a number of Independent government TDs declaring that they would not continue to support the Government and speculation mounting, Brian Cowen

Brian Cowen

called a press conference in which he announced that the Government intended to introduce and pass that year's Budget, and its constituent parliamentary bills, before having the 2011 election.

However, on 23 November, rebel members of Brian Cowen's ruling Fianna Fáil

Fianna Fáil

party and opposition leaders sought no-confidence vote for the Government and dissolution of the Oireachtas

Oireachtas

The Oireachtas , sometimes referred to as Oireachtas Éireann, is the "national parliament" or legislature of Ireland. The Oireachtas consists of:*The President of Ireland*The two Houses of the Oireachtas :**Dáil Éireann...

before a crucial budget vote on 7 December 2010, that should open the way for adopting the rescue package.

On November 28, the European Union

European Union

, International Monetary Fund

International Monetary Fund

and the Irish state agreed to a €85 billion rescue deal made up of €22.5 billion from the European Financial Stability Mechanism (EFSM), €22.5 billion from the IMF, €22.5 billion from the European Financial Stability Facility

European Financial Stability Facility

(EFSF), €17.5 billion from the Irish sovereign National Pension Reserve Fund (NPRF) and bilateral loans from the United Kingdom

United Kingdom

The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

, Denmark

Denmark

Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...

and Sweden

Sweden

Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

.

Eurogroup President Jean-Claude Juncker

Jean-Claude Juncker

Jean-Claude Juncker is a Luxembourg politician, 23rd and current Prime Minister of Luxembourg, since 20 January 1995. He is the longest standing head of government of any European Union state...

said that the deal includes €10 billion for bank recapitalisation, €25 billion for banking contingencies and €50 billion for financing the budget.

Protests against austerity

2010 saw several notable protests against austerity in Ireland.

Collapse of the Cowen administration

On 6 February 2011, it was revealed that Ireland had received a first €3.6 billion of the rescue package from the EFSF. This is a slightly higher amount than was previously expected mostly due to the better than expected auction of the EFSF bonds in January 2011. Later that month the coalition government of Fianna Fáil and the Green Party lost the 2011 general election and were replaced by a coalition made up of Fine Gael

Fine Gael

and the Labour Party

Labour Party (Ireland)

.

In April 2011, despite all the measures taken, Moody's

Moody's

Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...

downgraded the Irish banks' debt to junk status. Debate continues on whether the new government

Government of the 31st Dáil

The Government of the 31st Dáil is the present Government of Ireland, formed after the 2011 general election to Dáil Éireann on 25 February 2011. Fine Gael entered into discussions with the Labour Party which culminated in a joint programme for government. The 31st Dáil first met on 9 March 2011...

will need a "second bailout". By August 2011 the largest of the six state-guaranteed banks, Bank of Ireland, had a market capitalisation of €2.86 billion, but loans to the six by the ECB and the Irish Central Bank were about €150 billion.

Student actions

As the year went on students became increasingly concerned about the honesty and integrity of the pledge signed by Ruairi Quinn

Ruairi Quinn

Ruairi Quinn is an Irish Labour Party politician who has been Minister for Education and Skills since March 2011. He is currently a Teachta Dála for the Dublin South East constituency. He was Minister for Finance from 1994 to 1997, and leader of the Labour Party from 1997 to 2002.-Early...

before the election that the Labour Party would oppose increased tuition fees.

On 16 November 2011, thousands of students, their parents and families, descended on Dublin from around the country and marched on Government Buildings amid concerns about the reintroduction of third-level fees. A small group also engaged in a sit-down protest outside the Fine Gael office on Dublin's Upper Mount Street.

At around 16:00 on 29 November 2011, three student union presidents (of Galway-Mayo Institute of Technology, University College Cork and IT Carlow) under the leadership of Union of Students in Ireland (USI) President Gary Redmond occupied a room at Department of Social Protection on Dublin's Store Street as part of a continued effort to have the Labour Party clarify its position on tuition fees. Police broke down the door of the room in which they were stationed and led them away. The students came armed with a chemical toilet and supplies off ood that could have lasted them weeks. Ten student union presidents also attempted to occupy a room at the Department of Enterprise on Kildare Street for the same reasons.

Nine FEE students, also seeking clarification on the government's view on third-level fees, participated in a peaceful sit-down protest by occupying the constituency office of Fine Gael TD and former mayor Brian Walsh in Bohermore, Galway, around midday on 30 November 2011. They unfurled a banner on the roof with the message, "FREE EDUCATION NOTHING LESS". They were imprisoned by the police and released a short time later.

Other protest actions

On 26 November 2011, thousasnds of people marched against austerity in Dublin.

On 1 December 2011, Roscrea District Court solicitors staged a walkout over the courthouse's closure.

On 15 November 2011, Willie Penrose

Willie Penrose

Willie Penrose is an Irish politician. He has been a Teachta Dála for the Longford–Westmeath constituency since May 2007...

resigned as Minister of State for Housing and Planning

Ministers of State of the 31st Dáil

This is a list of Ministers of State of the 31st Dáil. On 9 March 2011, the 29th Government of Ireland was nominated by Dáil Éireann on the advice of the Taoiseach, and then appointed by the President...

due to his opposition to the Government's decision to close the army barracks in Mullingar

Mullingar

Mullingar is the county town of County Westmeath in Ireland. The Counties of Meath and Westmeath Act of 1542, proclaimed Westmeath a county, separating it from Meath. Mullingar became the administrative centre for County Westmeath...

. He also resigned the Labour parliamentary party whip. Tommy Broughan

Tommy Broughan

Thomas P. "Tommy" Broughan is an Irish politician. He has been a Teachta Dála for the Dublin North–East constituency since November 1992. He sits as an independent TD after losing the Labour Party whip on 1 December 2011....

TD was expelled from the Labour Party on 1 December 2011 after voting to reject a government amendment to extend the bank guarantee for another year.

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