Professor Alan Ahearne:

The collapse of the banking system and the economy meant that the markets were not confident about lending to the Irish State at adequately low interest rates. The fact that the Irish State had to recapitalise the banks was an element of that. It was expensive. The headline figure was €64 billion. There was uncertainty around that period about how much extra funds would have to be put in. That uncertainty was an element, but only one element. If the Irish economy had grown strongly - if the growth prospects were strong - the markets would have been less worried. If, for example, outright monetary transaction or the ECB’s quantitative easing had been introduced in mid-2010, presumably that would have calmed the sovereign debt market and the market would have continued to lend to the Irish Government at low interest rates and Ireland would not have needed official assistance. There were many components.