Ireland's Financial Crisis: Business Performance and Strategy

This case study analyzes the financial crisis in Ireland, focusing on the period described in Michael Lewis's "Boomerang." It examines the country's business performance before, during, and after the 2008 crisis, highlighting the impact of the housing market collapse and government responses. The study explores the economic trends that affected businesses, including recession and job losses. It then provides strategic recommendations for Ireland's business environment over the next 5-10 years, emphasizing the need for job creation, government fiscal responsibility, and secure work environments. The analysis considers the long-term consequences of the crisis and proposes measures to foster sustainable economic growth and stability. The student's work includes a summary of the book, an analysis of the country's business performance, and strategic recommendations for the future.

Running head: IRELAND CRISIS
Ireland Crisis
Name of the Student
Name of the University
Author Note

1IRELAND CRISIS
Introduction
The different nation states of the world experienced a financial crisis in the year of 2008.
This financial crisis was not as severe as the Great Depression of the 1920s, but it did have a
significant repercussive impact on the human civilization (Lewis 2011). The most affected nation
states of the world were those that belonged to the Western Hemisphere such as the countries of
the European continent. This posed a serious challenge and threat to the population of the
citizens of these countries and also negatively impacted their livelihood. This essay tries to
understand the financial crisis as it existed in the country of Ireland during the financial crisis of
2008. For this purpose, the opinions of Michael Lewis has been looked in to. In his book, the
“Boomerang”. Lewis talked about the condition of the different nation states of Europe, one
among them being Ireland.
Business Performance of Ireland
Michael Lewis (2011) talked about the country of Ireland in the third chapter of his book
known as the “Boomerang”. Lewis had travelled to the region of Dublin, the capital of Ireland, in
the year 2010. Before the financial crisis of 2008, Ireland was considered to be the second richest
country in the world. However, with the inception of the financial crisis of 2008, the banks of
Ireland sustained a loss of 106 billion Euros (Lewis 2011). Due to such losses, the Credit
Analysis organization claimed that Ireland would become the third largest defaulter in the world,
just after Iraq.
This situation of Ireland was a complete change than that which existed in the beginning
of the century. Towards the latter half of the twentieth century, there were nearly one million
Irish population who were living in very miserable conditions. They were below the designated

2IRELAND CRISIS
poverty line and could not afford even the basic means of subsistence. They had no source of
livelihood and as a result, they used to suffer a lot.
However, this situation changed towards the beginning of the twenty first century. The
economy strengthened to such a degree that different people from all over the globe started to
migrate to Ireland in order to earn a decent standard of living. This shows the strengthening of
the economy of the country.
However, the situation again changed for the worse with the onset of the financial crisis
of 2008 (Lewis 2011). During this time the prices of the houses fell down by 31.8 percent. This
situation was initially welcomed by the realtors as they believed that this would help the market
to return to its equilibrium position. Before this, the housing prices were sky high and was
therefore not affordable by the general public. However, the fall in the prices of the houses
caused a problem as those people who were interested to purchase houses, took a lot of loan from
the banks. Since the loans were coupled with the house mortgages, this posed a serious threat to
the credibility of the banks. The entire western economy started to deteriorate as the financial
crisis slowly started to take a hold (Lewis 2011). The fall in the housing prices was followed by a
period of recession and soon thereafter, people found it quite difficult to find a prospective jobs.
This affected nearly the entire population of the concerned nation states and they started to lose
their source of livelihoods.
The fall in the housing prices severely impacted the economy of Ireland. Majority of the
work force of Ireland was engaged in the housing sector and therefore, this sector experienced
considerable recession in the country. This situation was further aggravated by the actions and
measures of the government. The government of Ireland decided to provide financial guarantee
to all the banks of the country facing a loss. In other words, the financial debts of the banks

3IRELAND CRISIS
would be waivered by the government (Lewis 2011). This decision was rationalized on the fact
that it would help to maintain calm in the market. However, this measure of the government was
not welcomed by either the management of the banks of the country or by the general public.
The banks did not work in isolation from the public. As a consequence, they needed to recover
the debts that were incurred. Furthermore, the government formulated its policy of relief in such
a manner that it sought to recover the additional cost from the tax payers themselves. This was
widely rejected by the public as they felt that they were being treated unfairly. This has had a
serious adverse impact on the business of the country.
Trends that would impact the business performance in the next five to ten
years
The financial crisis of 2008 would have significant impact on the business performance
of the country. Ireland had majority of its work force engaged in the housing sector. This is what
led to the increase in the business performance of the country in the beginning of the twenty first
century (Lewis 2011). However, with the crash in this sector, the employees who were working
in this field, faced a loss of their livelihood. Thus, the major trend that would impact the business
performance of the country is that of recession. Recession refers to the situation whereby the
Gross Domestic Product of the country gets severely impacted as a result of the decline in the
business activity. Since majority of the employees were working in the housing sector, a slump
in this sector who lead to a fall in their employment opportunities.
The primary objective of every business organization is to find the means to increase its
level of profit margin. In order to ensure a rise in this profit margin, there should be a subsequent
rise in the level of production. This is due to the fact that when more additional unit of products
and services are produced, their sales volume increases. The more a product is sold, the higher

4IRELAND CRISIS
level of profit margin that is earned by the producers. In this regard, the depression that was
experienced in the housing sector adversely impacted the profit margin of the managers and the
employees working in this field. The employees could no longer find any other source of
livelihood as the entire economy was in shambles. From the analysis of the severity of the
financial crisis, it can be seen that for the next five to ten years, it would be quite difficult for the
employees to find any other sources of employment.
Strategy Recommendations
There is a need on the part of the business organizations to ensure that their level of
production is always kept at an all-time high. This would guarantee the growth ad development
of the concerned business firm. However, in order to do this, the management should not only
concentrate on the production levels and sales volume. These two factors are dependent upon the
activities of the employees. In other words, it is the hard work and the dedication of the
employees which determine the growth of the business. Besides the activities of the management
level, it also depends upon the state they are working in to provide for safety and safe guards for
the workers who are working hard to improve the economy. In this regard, certain
recommendations can be provided which would aid to overcome the financial crisis experienced
by Ireland and to ensure the subsequent growth and development of the country and its
businesses.
The first recommendation is for the government of the country. The government of
Ireland should not make hasty promises which it cannot fulfill. The debts that were incurred in
the course of the financial crisis year should not be sought to be waived off by the government. It
would put an unnecessary burden on the other members of the society and can have the potential
to increase the inflation rate of the country. Instead, the government should aim at creating more

5IRELAND CRISIS
jobs for the public. Providing a platform to the people is more worthy and helpful than simply
trying to solve their problems with money. An employment opportunity would go a long way in
proving the people with a source of their livelihood, which in turn, would determine their basic
means of subsistence. Thus, the creation of jobs by the government of a country is preferred than
trying to waive off the tax payers.
The second recommendation which would help to improve the business performance of
the country is that the management level should take the necessary mentions to ensure that safe
environment is provided to the workers. The workers are required to work for the business
organization. The business firm in turn, has certain obligations and responsibilities towards the
workers. In this sense, the firms are required to aid the workers in making their lives comfortable
and secure. Furthermore, the organization should be responsible towards guaranteeing the
security of tenure of the workers. In other words, those employees who are working efficiently in
their place of work, should be retained and given a security of their tenure.
All these recommendations aim to provide the security of the employees in the country of
Ireland. The financial crisis experienced by them in the year 2008 left the employees without any
means of their livelihood. This needs to be reduced to a considerable extent so that Ireland can
resume its position in the global market as it enjoyed during the beginning of the twenty first
century.
Conclusion
To conclude, it can be observed that the different nations of the western hemisphere faced
a lot of trouble during the financial crisis years of the twenty first century. Michael Lewis made
an attempt to survey all the different nation states of the European continent and assess the harm
done by such occurring. One of the countries analyzed by Lewis was that of Ireland. In his book,

6IRELAND CRISIS
he stated that majority of the working people of Ireland were engaged in the housing sector.
Thus, with the onset of the financial crisis which occurred as a result of the fall in the housing
prices, the working class of Ireland was severely affected. They lost their means of livelihood.
Situation turned for the worst and even now, Ireland is yet to recover from the financial crisis
that it faced in the year of 2008. Certain recommendations have been provided in order to ensure
that the work conditions of the employees are changed for the better in the country of Ireland.
The people have been adversely impacted and now it is the responsibility of the government to
provide for its citizens.

7IRELAND CRISIS
References:
Lewis, Michael. Boomerang: Travels in the new third world. WW Norton & Company, 2011.