Cutback management in Ireland in the wake of the financial crisis

Abstract

Ireland was one of the European states most severely affected by the financial crisis. A number of official reports into the causes of that crisis (Regling and Watson 2010; Honohan 2010; Nyberg 2011; Independent Review Panel 2011, Houses of the Oireachtas 2016) have pointed to a combination of domestic contributing factors, including weak regulation of financial institutions, weak state capacity and pro-cyclical fiscal policies adopted by successive governments from the late 1990s. The crisis resulted in one of the world’s largest ever state-backed bank guarantees and a subsequent ‘bailout’ loan from the Troika of the IMF, EU and ECB in late 2010. Also as a consequence of this crisis, the 2008-15 period was defined by an unprecedented series of cutbacks in the Irish public service, as part of a broader strategy to reassert control of the state’s finances.