debt was under control, private debt was not. returning to figure 5 shows the rapid expansion in net foreign debt of the irish banks. recalling what i have said about the banks ’ earlier behaviour, the speed and scale of this accumulation was altogether new. the irish banks were moving into unfamiliar deep waters, where they would soon get into difficulties and drown. growth in the new millennium relied increasingly heavily on bank - financed property - related revenues to support – directly or indirectly – employment, profits, dividends, wage and salary income levels, and tax revenue. the rapid reversal in the trend of public debt after 2007 has been quite explosive. it reflects both the injection by the government of funds into the failed private banking system, as well as the emergence of a huge deficit on the rest of the government ’ s accounts, shorn as they now are of the boom - time tax revenues. 8 once again, it seems that the irish economy has shown a propensity for rapid changes of fortune. it is not to understate the severity of the debt challenge, public and private, currently facing the irish economy to recognise this propensity, and to believe that it reflects in part a flexibility which will clearly be a very helpful ingredient in the recovery. 9 had it not been for the official funding from eu and imf sources, the budgetary cutbacks would have had to be much more severe, and economic wellbeing would have been much more badly affected. indeed, the collapse in incomes and the rise in unemployment in the crisis largely predates the arrival of the troika. unemployment at the end of the programme was lower than at the beginning. but now the legacy of debt, public and private ( only some of which can be attributed to the famous bank guarantee ) presents major challenges for government and for over - indebted households, firms and their bankers. for the government, there has been the challenge of dealing with indebtedness. of course the early decision to socialise the risks of bank losses has turned out to be much more of an unnecessarily open - ended gamble than it can have seemed at the time to the decision - makers, blindsided as they were to the lack of well - quantified underpinning of the advice they were being given. from that point on, as more and more information emerged 2002 ; and perotti, 2012 ). we therefore have not included this episode in our case studies because it does not seem repeatable

peter tari : overview of the vanuatu economic performance presentation by mr peter tari, deputy governor of the reserve bank of vanuatu, at the reserve bank of vanuatu, port vila, 7 june 2006. * * * overview and performance • vanuatu ’ s economic performance has been affected by a number of factors, including the smallness and isolations of the islands, globalizations and gradual loss of preferential markets, natural calamities, lack of capacity and political instability. • vanuatu is made up of some 80 mostly volcanic islands that extend approximately 1, 176km in a north - south direction. the total land area is 12, 281. 25 km² and the current crude population density is estimated at 17 persons per km². the country ’ s population growth rate is 2. 6 percent per annum and a real gdp per capita estimated at usd718 in 2004. the current population is estimated to be around 240, 000, of which 80 % are said to be living in rural areas and are engaging agriculture. • agriculture is the mainstay of the economy, and it makes up approximately 70 percent of the country ’ s exports. despite the fact that agriculture supports the bulk of the population, it is not the leading contributor to gdp. in the last six years agriculture make up on average 18. 3 percent of gdp. the services sector dominates the economy, accounting for around 73 % of total gdp followed by the agriculture. within the services sector, the wholesale and retail sector dominates with around 40 %. tourism, which makes up around 16 % of gdp, is becoming an important sector of the economy generating around 75 % of the total foreign exchange earned by the country. • economic growth since independence in 1980 has been erratic. the fluctuating trend in vanuatu ’ s economic growth was caused by a number of factors including political instability, the country ’ s vulnerability to natural disasters and changing international prices for vanuatu ’ s exports, and a whole of other factors. • the last five years also saw marked variations in growth. after two successive years of contraction in 2001 and 2002, real gdp rebounded in 2003 and has since been recording positive growth. growth in 2003 and 2004 ranged from 4 - 5 % and has been driven by agriculture and services sectors. positive real gdp growth continued in 2005 but at lower magnitude compared the preceding two years. in 2005, the services and industry sectors continue to grow therefore more than offset a negative contribution from the agriculture sector. the services sector grew by 4. 7 percent in 2005