Ireland and Spain’s crises stemmed from bank real-estate lending, not fiscal profligacy

Evidence

Unlike Greece, both Ireland and Spain were “best in class” in terms of debts and deficits going into the crisis. In 2007 Ireland’s net debt-to-GDP ratio was 12 percent, and Spain’s was 26 percent. In contrast, Germany’s debt sat at 50 percent of GDP. Why, then, did Ireland and Spain have a crisis when Germany did not? The answer, as usual, begins and ends with the banks, in this case via real-estate lending. — Mark Blyth, Austerity, 181

Categorization

• XREF: Connects directly to Mattei’s analysis of how the austerity narrative misdiagnosed the Irish/Spanish crises as fiscal when they were banking crises. — connects to: Europe’s rising debt ratios resulted from private financial crisis, not government profligacy — Mark Blyth, Austerity: The History of a Dangerous…, 149; European fiscal crises were consequences of private banking crises, not their cause — Mark Blyth, Austerity: The History of a Dangerous…, 205; The European debt crisis resulted from banking losses, not sovereign overspending — Mark Blyth, Austerity: The History of a Dangerous…, 40 (+8 more)
• ADDENDUM: Directly relevant to the ‘Grafting & Growth’ article’s theme of misattributed causes; more precisely supports the anti-austerity narrative of blaming banks vs states.

Broader Connections

• The European debt crisis resulted from banking losses, not sovereign overspending #corroborates (0.95) — Mark Blyth, Austerity, 40
• European banking crisis was mostly private-sector exposure, not sovereign over-spending #corroborates (0.95) — Mark Blyth, Austerity, 240
• European fiscal crises were consequences of private banking crises, not their cause #corroborates (0.90) — Mark Blyth, Austerity, 205
• The Eurozone crisis was private, not public, debt #corroborates (0.90) — Mark Blyth, Austerity, 190
• Spain’s housing bubble was smaller than Ireland’s but far more consequential #expands (0.80) — Mark Blyth, Austerity, 187
• Spain’s crisis emerged from regional savings banks, not its largest internationalized banks #expands (0.80) — Mark Blyth, Austerity, 185
• States were complicit but did not cause the European debt crisis #qualifies (0.80) — Mark Blyth, Austerity, 199
• Neoliberalism’s crisis strategy redirected blame from banks onto state debt #expands (0.80) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 475
• Austerity framed economic crisis as caused by governments and workers, not capital #expands (0.75) — Clara E. Mattei, The Capital Order, 783
• Leverage explains vulnerability but not the specific cause of a financial collapse. #qualifies (0.70) — Donald MacKenzie, An Engine, Not a Camera, 1021