The Mega-Crisis – written four years ago today

The Mega Crisis
By Brendan Halligan

Written on 12 October, 2010 – one month before the EU and IMF came to Dublin for bailout talks, re-reading it today is a fascinating exercise, in the light of subsequent events. 

In the paper, Brendan Halligan examines the nature of the Irish monetary crisis, and makes some cogent observations on the exact nature of the Irish “Mega Crisis”:

“At the present time, Ireland is in the middle of a Mega-Crisis which will continue unabated up to the next election and dominate the life of the new government. It consists of ten interdependent crises, which have become interlocked through a process of circular causation.

The process began with the meltdown of the banking system as a direct result of a prolonged property bubble caused by the classic formula of abundant credit, low interest rates, lax supervision and managerial mania. The banking failure led to an abrupt decline in output and demand, which, in turn precipitated an immediate drop in tax revenues and a rapid increase in unemployment.” …