Sooner or later, these losses would have to be provided for. By the autumn of 2009 there was a growing recognition that prospective losses on developer loans were likely to be very high, and that these losses would crystallise when NAMA purchases occurred.
This suggests that, to the extent that inflation differentials do not reflect differences in growth rates of productivity, the dampening effect of loss in competitiveness has been offset by other factors, such as interest rate decreases in the period up to the adoption of the euro, inflows of EU structural funds, immigration and financial liberalization.