economic recession

economic recession

The Financial Crisis in Ireland - a photographic reportage

2w ago
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Description

Ireland's Financial Crisis of 2008, pushed the country into economic recession and led to a sovereign bailout in 2010. The Crisis was largely due to a collapse of the banking sector, where all of Ireland's main banking institutions became highly unstable or completely insolvent, as in the case of Anglo Irish Bank. The bailout fund was used in part to rescue the banks and is being financed by the Irish people through severe austerity measures. The banking crisis exposed many scandals and irregulations among the banks, property developers, investors and the government. In the years prior to the crisis Ireland experienced a period of intense economic development and property price inflation. The under-regulated banking sector along with other systemic factors meant easy credit was available to fund large construction projects. The construction sector exploded as developers raced to buy land, build and sell. In this frenzy to make profit many construction projects were poorly finished or did not comply with fire, health and safety regulations. The construction boom led to severe over supply and eventually reached its tipping point. The resultant property crash in 2007 left banks, developers and investors exposed with mounting debts. Thousands of unfinished construction sites across the country were abandoned by developers. Many phased housing projects were only partly sold, leaving large sections vacant. These vacant and unfinished housing estates have been coined "ghost estates", of which there are some 2,000 such estates nationwide. Many Irish developers and businessmen fled to the UK to declare bankruptcy there, where bankruptcy laws and restrictions are significantly more lenient. Thousands of individuals are in negative equity, having bought houses at the height of the boom which are now worth only a fraction of the boom price, and are in mortgage arrears. Although the Irish people are financing the bailout which rescued the banks, many are now facing repossessions by the very banks they have rescued. Poverty, personal insolvency, unemployment and immigration have all increased dramatically since 2008.