The same charts also show that the Irish downturn – led by an exceptional construction crunch – was well under way by the time of the notorious bank guarantee (which was granted just a couple of weeks after the Lehman bankruptcy) (Figures 4–7 show the time-line on relevant macro indicators).
The institutions and sovereignty Fact 2: “The IMF agreed to endorse a programme which risked debt unsustainability, justifying this by the need to avoid spillover effects on other countries.” The Irish authorities agreed to the EU-IMF programme despite sharing doubts as to its sustainability on the grounds that it represented the best short-term course of action for Ireland 1 and left open the possibility of later relief, which in due course came, not least through the reduction in EU interest rates (from an initial level of 5.8 per cent per annum) and lengthening of the loan maturities, and subsequently through the financial arrangements around the liquidation of the failed bank IBRC (successor to the notorious Anglo Irish Bank).