Many observers have appreciated the Irish response to the crisis

The debt crisis in some member states of the European Monetary Union shows once more how closely related bank crises and sovereign debt crises are.

However, the details of the crises in the various countries are quite different. In Ireland, the consequences of a bursting bubble on financial and real estate markets are the main problem. Many observers have appreciated the Irish response to the crisis.

The Irish economy seems to be competitive, as the almost balanced current account shows. However, important problems remain. Firstly, risks and losses are carried by the taxpayer and not by those who benefited most from the previous boom, the share holders and owners of banks. This distorts incentives for future risk awareness.