Good piece on the Christian Science Monitor blog comparing the Irish and Greek crisis. The author defends four main differences:

1)      …while the Greek crisis involves long time fiscal mismanagement with systematically too large deficits even during the boom, the Irish crisis is instead a case of a bursted property bubble that has created big problems in the banking system. Indeed, Ireland actually had a surplus during the boom. However, that surplus was of course largely based on revenues from the property bubble.

2)      …related difference is that Ireland last year actually had a debt level below the euro area average (65.5% of GDP versus 79.2%). This year’s massive deficit will probably push it above the average, but it will still be significantly less than Greece and some other countries.

3)      A third related difference is that whereas the bulk of the Greek deficit is structural, the Irish deficit this year is mostly a result of the one time factor known as the bank bailouts. This means that even without either austerity or recovery, the Irish deficit will drop dramatically in the coming years once the recapitalization of the troubled banks are finished with.

4)      A fourth difference is that Ireland has more to lose from a IMF-EU rescue package. In Greece, there was no real disadvantage in taking that package because the austerity measures was needed anyway (though they arguably chose to rely too heavily on tax increases and too little on spending cuts) and because it lowered their cost of borrowing. While Ireland too needs more austerity measures (preferably spending cuts) and can lower its cost of borrowing, theere is a risk that the other EU countries might condition aid on an increase in the Irish corporate income tax rate.