Let me start with the government finances. After the dramatic budgetary correction of the late 1980s, this was not expected to be a problem. Indeed, as shown in Chart 1, Ireland ran a balanced budget on average for two decades before the collapse of 2008.
It satisfied the deficit criterion of the Stability and Growth Pact (SGP) of the European Monetary System before it was invented. And there was no drift: indeed the deficits became smaller and turned into surpluses in the early years of the new millennium.