Its difficult to know what the figures on that chart mean, after casual inspection. Is it gross debt? Debt net of assets? How are they calculating the debt?
There are more subtle issues, too. Its very hard to know what to count as Irish sovereign debt. Do you count 'working capital' on loan from the ECB? How do you value the assets of the nationalised banks, which perhaps count against debt? Also, adding to the confusion, is that countries have an incentive to use various accounting strategies to minimise the figures.
So its very hard to come up with an estimate that everyone agrees on.
One of the Irish economic commentators, generally thought to hold the most pessimistic outlook, is academic economist Morgan Kelly; he wrote an article in the Irish times, in May, where he estimated the debt at 250B euro (~$340B) (http://www.irishtimes.com/newspaper/opinion/2011/0507/122429... - pretty grim reading).
Obviously a terrible amount of debt, but its half the amount quoted in the NYT.
Basically, we had a housing bubble in Ireland, some very careless bank management (like the rest of the world) and a political failure to either A) regulate the banks properly, or B) to deal with the consequent bank failures properly.
When things started to go south in September 2008, the government of the day made a decision to guarantee much of the debts of the main Irish banks. This turned out to be a very bad decision. Its also a decision that the ECB and other EU countries won't let Ireland wriggle out of, as many of the creditors of the Irish banking system are other EU financial institutions (worried about systemic risk) - to the extent that Ireland recently paid off a controversial unguaranteed bank loan, under pressure from the ECB.
So this is why the Irish sovereign debt is so high.
The fundamentals of the economy could have been better - there was too much building construction, for a start - but they weren't bad; the state functions, people pay their taxes, Irelands a good place to do business, and is becoming a very friendly place for startups; so the scenario is very different from Greece; but the level of debt is sadly huge.
There are more subtle issues, too. Its very hard to know what to count as Irish sovereign debt. Do you count 'working capital' on loan from the ECB? How do you value the assets of the nationalised banks, which perhaps count against debt? Also, adding to the confusion, is that countries have an incentive to use various accounting strategies to minimise the figures.
So its very hard to come up with an estimate that everyone agrees on.
One of the Irish economic commentators, generally thought to hold the most pessimistic outlook, is academic economist Morgan Kelly; he wrote an article in the Irish times, in May, where he estimated the debt at 250B euro (~$340B) (http://www.irishtimes.com/newspaper/opinion/2011/0507/122429... - pretty grim reading). Obviously a terrible amount of debt, but its half the amount quoted in the NYT.
How did Ireland get like this? A comment elsewhere on this article has a pretty good summary: http://news.ycombinator.com/item?id=3230142
Basically, we had a housing bubble in Ireland, some very careless bank management (like the rest of the world) and a political failure to either A) regulate the banks properly, or B) to deal with the consequent bank failures properly.
When things started to go south in September 2008, the government of the day made a decision to guarantee much of the debts of the main Irish banks. This turned out to be a very bad decision. Its also a decision that the ECB and other EU countries won't let Ireland wriggle out of, as many of the creditors of the Irish banking system are other EU financial institutions (worried about systemic risk) - to the extent that Ireland recently paid off a controversial unguaranteed bank loan, under pressure from the ECB.
So this is why the Irish sovereign debt is so high.
The fundamentals of the economy could have been better - there was too much building construction, for a start - but they weren't bad; the state functions, people pay their taxes, Irelands a good place to do business, and is becoming a very friendly place for startups; so the scenario is very different from Greece; but the level of debt is sadly huge.