When most people think of Ireland, they picture rolling green hills, lush green grass, and puffy white cottony clouds. They think of rainbows and leprechauns and, of course, potatoes and Guinness. When most people think of Ireland, a $112 billion (85 billion Euros) bailout does not come to mind.

 In the 1990s, Ireland experienced great economic growth. The capital going in, however, soon rushed out, causing the economic crisis.

 Senior and Economics and Business Major Alex Rouse has been doing research on Ireland for his Money and Capital Markets class. Speaking to The Guilfordian, he gave his insight into the sources of the seemingly sudden economic collapse.

 “I have observed that foreign investment fostered rapid economic growth in the 90s,” said Rouse. “This boom period allowed people access to cheap credit which created a housing boom that was able to sustain continued economic growth despite the fall in foreign investment. With asset prices increasing and no new foreign capital coming in, the economy became increasingly funded by credit.”

 According to Rouse, the crisis only further increased credit abuse, which eventually led the Irish economy to collapse.

 During October and November of this year, the Irish government gave billions of Euros to the Irish banks in an attempt to keep them from collapsing, CNN reports.

 John Shortall, a resident of Castlecomer, Ireland gave the Guilfordian an insider’s look at the situation.

   “On Sept. 28, 2009, the banks went during the night to the government and said if the government didn’t guarantee deposits in the banks, there would be a ‘run’ on the banks, and Ireland’s entire banking system would collapse,” said Shortall.

 By “run,” Shortall references a possible mass withdrawal from the banks, for fear of bankruptcy.

  “The banks told the government that an injection of approximately seven billion Euros would fix the problem,” Shortall continued. “This soon rose to 14 billion Euros and then to 50 billion. The Irish Government could not give this vast amount, and tried to borrow from the European central bank.”

 “Ireland, like the other European countries are connected into a system of financial capitalism, where capital can flow freely from one place to another,” said Voehringer Professor of Economics Robert Williams. “The way this financial capitalism works is that places are tied together by people who own security bonds and if all of the sudden they get scared, the whole country goes down.”

 Ireland is not the only European country that is currently struggling to salvage its economy. In fact, in May, Greece received a $150 billion bailout, and Spain and Portugal are also struggling with a grave economic downturn, according to CNN.

 While CNN reported on Nov. 29 that this bailout could give Spain and Portugal a bit more breathing room, the Association for Financial Professionals (AFP) has more recently reported that Portugal is most likely to be next for a bailout.

 “Now, the problem is that there’s a contingent affect of the capital,” Williams explained. “So, if one government has (economic) problems, the bond holders then sell off other government bonds. For example, now, they are starting to hit Spain and Portugal. They’ve already hit Greece; Greece was the start of the thing, then it hit Ireland.”

 According to CNN, The Irish bailout will consist of 85 billion Euros. Of that amount, 10 billion Euros will be used for immediate recapitalization, 25 billion Euros for bank support, and the other 50 billion Euros will be used for the rest of the budget needs.

 The reactions to this bailout have not all been supportive.

 “The bailout is like any family getting a loan from a bank; you have to show you can repay it,” Shortall stated. “The IMF and the European governments want Ireland to cut our day-to-day spending by 15 billion Euros over the next five years.”

 According to Shortall, this could detrimentally force cuts in public services to a mere 25,000 people in hired staff. Hospitals may see closure, and the minimum wage has already been severely decreased — by 12 percent.

 “The people (of Ireland) are very angry at our government for letting this all happen,” said Shortall.

 In fact, many Irish citizens are protesting the bailout. 

 “We don’t want to pay for private business, private industry and corrupt government,” irish protestor Tom Coleman stated in an interview with Democracy Now. “We don’t want the IMF (International Monetary Fund) in here. The IMF created this situation, and they’re in for the money. And they don’t care about the future. They don’t care about Ireland.”

 Despite crossed fingers, the Euro has begun to see decline, and the economic future for Ireland still teeters on the brink of one of the biggest economic challenges the country has seen in decades.