In the early 1990s, Irish government debt was 95 per cent of GDP by 2007 this had fallen to 25% of GDP - which was one of the lowest by international comparison. Yet, three years later, Ireland is facing bond yields of 9% and has finally requested a bailout from the EU and IMF to prevent insolvency. The speed at which Ireland went from 'model economy' to junk bond status is quite startling. Many of the reasons were explained here in Irish Economic Crisis
The problem is that there are a few more Euro member countries facing similar problem - Portugal and Spain both share this dramatic fall in GDP, house prices and rise in borrowing costs.
The bailout for the Irish economy is between 80 and 90 billion Euros. This will come from two EU funds - the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM). A third will come from the IMF. The UK is said to have agreed a small bilateral loan.
In Ireland, public sector wages have already been cut by 20 per cent and property prices have plummeted 30 per cent. But, as part of the deal, Ireland needs to accept another four year austerity package. Unemployment is likely to continue to increase and it is hard to see how Ireland could grow out of this problem.