Ireland’s political economy shifted from the 1990s to the 2000s. But who did the shifting and how? The following chapters explore the role of the dynamics of the EU and of national politics. However, our story starts with the key actor in the global political economy in the past two decades of liberalisation and financialisation – capital.

On one reading, Ireland’s financial crisis was a very local crisis. The subprime mortgages and securitised mortgage products that were central to the triggering of the US crisis were much less important in the Irish case, where lending to developers and inflated property prices were much more significant (Connor et al., 2012). While mortgage lending practices loosened in the 2000s, the crisis was not caused by mortgage defaults (although these became significant elements of the evolving crisis).

However, other features of the Irish crisis were shared more broadly. As Connor et al. (2012) point out, Ireland shared with the US features such as ‘irrational exuberance’ among market actors, a ‘capital bonanza’ (easy access to cheap capital for banks – in the Irish case through international borrowing) and failures of regulation and ‘moral hazard’. In addition, the various crises of the current period are linked through increasingly close financial integration, with the US crisis in 2008 acting as the tipping point for the Irish banks’ collapse as inter-bank liquidity dried up very rapidly. This financial integration itself was closely linked to a broader project of economic liberalisation in recent decades.