Ireland is in the throes of an economic crisis that has thrown thousands out of work and pushed many young people to emigrate to other nations.

Massive debt forced Dublin in November 2010 to accept an 85 billion-euro ($113 billion) aid package from the European Union and International Monetary Fund. In exchange, the government cut spending, slashed jobs, eliminated social programs and raised taxes.

Now, a similar saga is rippling cross the 17-nation euro zone, where the crisis in Greece threatens to be far worse than what Ireland faced. Ireland, which is roughly the size of Maine, has a population of about 4.2 million. The country has seen waves of emigration during periods of political and social upheaval and harsh economic downturns that have led hundreds to leave it shores in search of a better life, bringing their diverse culture to several countries including the U.K. and the United States.

International Business Times spoke to an expert on Ireland to discuss the present crisis and how it differs from previous periods of economic hardship on the Emerald Isle.

Professor Cillian Ryan is Dean of Liberal Arts & Sciences and the Jean Monnet Chair in European Economics at the University of Birmingham in the UK.

IB TIMES: Can you estimate how many Irish are now leaving the country (on a weekly or monthly basis)?
RYAN: According to the latest figures from the Central Statistics Office, net emigration was approximately 34,100 last year. About 76,400 people emigrated from Ireland (or 6,383 per month) and 42,300 immigrated into Ireland.
Of those who left it is estimated that a little over half were Irish, just over 40,200. Among returnees, about 17,100 were Irish. Therefore, the net emigration by Irish people was about 23,100, or about 1,900 a month.
That figure of 23,100 for Irish emigration is the highest recorded since 1990, although it remains well below the rates seen during the mid-1980's, when the bulk of the 40,000 annual emigrants were Irish rather than some combination of Irish and others as we see now.

IB TIMES: What about Eastern European immigrants? Are they also departing Ireland?
RYAN: Indeed, another big story is the reversal of the Eastern European immigration into Ireland - only 9,000 people from this region entered Ireland last year, down substantially from a figure of 52,700 in 2007.
Overall there has been a net outflow of 35,000 Eastern Europeans over the last three years (although the number has tapered off significantly this year with a net outflow of just about 6,000.
This group is also disproportionately represented in Irish unemployment statistics, suggesting that at least some are prepared to tough it out rather than head home or move to other alternative employment markets.

IBTIMES: The Irish unemployment rate is something like 14 percent. How high do you think that figure can rise to before it peaks?
RYAN: The Irish jobless rate is currently 14.2 percent, having peaked at 14.7 percent last April. It could, of course, rise again.
Historically, Ireland has not gone much over this level - joblessness reached 16 percent in the mid-1980s - precisely because emigration has always acted as a safety valve and the Irish have been willing to leave the country.
It would be also be fair to say that when unemployment rates increase like this, the 'black' [underground, untaxable] economy also tends to rise, and the true jobless figure is probably slightly less than the headline - but this is true of most countries.

IBTIMES: Ireland has frequently in his history seen waves and waves of emigration. What, if anything, makes the current emigration story any different from previous episodes?
RYAN: Irish waves of emigration were typically associated with downturns in the economy -- for example, in the modern era, we suffered recessions in the 1930s, 1950s and the 1980s.
Prior to the 1980s, emigration from Ireland tended to mean just that, once one left that was it, returning was rare.
In addition, most emigrants back then were not college graduates, with a preponderance of people with modest skills. The experience of the 1980s changed all that, although I don't think we fully appreciated it at the time.
Thus, since the 1980s, we witnessed more emigrants who were highly educated and highly skilled. When the Irish government moved to liberalize secondary school education in the 1960s, this led to a large expansion in the pool of university students by the late 1970s and early 1980s. Of course, there were not enough high-skilled jobs available in Ireland for these graduates.
However, it was precisely these graduates (with their accumulated foreign experience) that international firms were subsequently able to tap into during the Irish economic boom of the 1990s and onwards. So, many returned after relatively short sojourns abroad (5-10 years) usually to take up senior posts, often in the same firm they had worked at overseas.

IB TIMES: So, now we are seeing more Irish emigrants who will only stay briefly overseas?
RYAN: The experience of the 1980s has made the prospect of temporary emigration less daunting, especially for the young. So, there is now much more of a sense of going away for a few years to experience living abroad, and potentially to return with new or additional skills and experience.
While this may not turn out to be the reality, the point is, emigration is less daunting now than in 1980.
However, I should emphasize that even in the best of times there was still significant Irish emigration (outward and inward). For example, in 2006, 15,000 Irish people went abroad, 18,000 returned. Thus the motive for such movement is more than just economic. For some it is the experience of working abroad (as in the Australian Working Holiday visa), for some it is about broadening their skills (both employment and education), and for others it is the opportunity to live in foreign cultures with different values.
Some find that their new locations suit them better and stay, while some return. What is probably true is that the incentive to avail of these opportunities increases when the economic situation deteriorates in Ireland.

IBTIMES: Historically, Irish emigrants usually went to UK and US. Where are they likely to go now?
RYAN: At the moment a colossal 30 percent of emigrants are going to Australia - this is a mixture of young persons' working holiday visas (by definition one-year, short-term) and a drive by Australia to recruit skilled workers which overlap with the largest categories of unemployment in Ireland, particularly with respect to the building industry and various technical skilled workers.
The UK still receives about 25 percent or Irish emigrants; however it is believed that this comprises a mixture of recent graduates and professionals probably returning to jobs in the UK and a smaller cohort of building and unskilled workers who are largely searching for work in a construction market which is itself performing poorly.
In declining order of importance the other destinations are the E.U. (17 percent), New Zealand, Canada (both about 4-5 percent) and the U.S. (slightly less 3-4 percent).
Obviously, Eastern Europe also figures highly (13 percent) but this is believed to be largely the returning Eastern European workers.
So yes, the pattern does look very different from the traditional UK/US split. It is also markedly different from the 1980s when there was actually a large unskilled illegal migration to the U.S., which was regularized ex-post by the awarding of a disproportionate number of visa lottery places to Irish people. Emigration to the U.S. now is almost entirely regulated and consists of skilled graduates.
For what it's worth the crude characterization is that construction workers are going to Australia, New Zealand, and Canada, while young graduates are going everywhere, mainly to the UK and continental Europe. Young adventurers (holding 1-year visas) are also going to Australia.

IBTIMES: As EU citizens, are Irish now going to Germany as well, given its booming economy? Or does the language difference preclude such a thing?
RYAN: No, language is not an issue. As I said earlier, about 17 percent of Irish emigrants are moving to the original EU-15 nations (excluding the UK), including Germany.
In general, Irish citizens' language skills are pretty good as a consequence of being forced to learn the Irish language from a young age, and by studying at least one continental language up to school leaving age.
This means that if Irish emigrants don't already have the relevant language skills or have it at a fairly poor level, they nevertheless can pick it up relatively easily. Significant Irish communities in most major European cities make the transition for newcomers relatively easy.

IBTIMES: Are young women also leaving Ireland, in tandem with men?
RYAN: Yes, in the 15-24 age category (believed to be mainly 18-plus-year-old school-leavers) the figures are close to evenly split with males just fractionally ahead (22 percent vs. 20 percent of total emigrants).
This age cohort represents about 42 percent of total emigration.
The largest single category (45 percent) are the 24-45 year-olds where male emigrants exceed females (27.5 percent vs. 17.7 percent). This suggests that there are a significant number of men in this age group going abroad seeking work alone, leaving family at home. Given the ease of travel between the UK and Ireland this may be a sensible option for some who are being pushed abroad for work, although the figure may also mask predominantly professional workers doing short-term assignments abroad.

IBTIMES: Which segment of the Irish economy has been hurt the worst by the economic crisis?
RYAN: Building and craft workers -- without a shadow of a doubt. This sector has completely imploded and there is no new building taking place. Remember this sector also expanded significantly in response to the property boom. These businesses attracted Eastern European workers, but also many Irish.
After that it really depends on when one got into the housing market! However, whichever sector one works in, if one bought a house, say after 2003, and were heavily mortgaged, then the financial crisis is a real worry.

IBTIMES: What about the public sector?
RYAN: In theory the public sector is undergoing significant changes and reductions in expenditure. There is a public sector hiring freeze and significant wage cuts (15 percent on average), and in theory job losses, but these are still voluntary and at present are being achieved through natural wastage.
However, even with salary cuts public sector workers are well paid by UK standards (a product of the boom years and comfortable budget surpluses). So if one is already in a public sector job, and bought a house before the boom in house prices, then you are doing okay - maybe not as comfortable as four years ago, but there are no real deprivation issues.
For public sector workers who bought a house after 2003, salary cuts are having a very real negative impact on living standards.

IB TIMES: If Irish youth abandon the country en masse, could you foresee small towns and villages simply vanishing as the remaining residents age and die off?
RYAN: We have a long way to go before we reach the levels of the 1960s when the Irish population hit a historical low of 2.8 million. While the population slowly recovered during the next 20 years, the expansion was largely around the cities (particularly the Dublin region which expanded from about 750,000 to 1.5 million.
During this period, small towns in the South-West, West and North-West and Midlands really struggled. Getting Gaelic football teams together was a real challenge in some areas. While the population overall has now risen to 4.2 million, the bulk of this is still located in Leinster [the east of Ireland which includes Dublin], with slower growth in provincial towns.
Having said that, there was a significant expansion in all major towns throughout Ireland during the boom, with increases seen in the housing stock in nearly all major towns.
The other point to stress is that Ireland is still a relatively young economy, due in part to the recent population growth.
The question of the aging people 'dying off' really boils down to whether the youth emigration for 'experience' (both professional and social) is temporary; or whether the economy stagnates and young people stay abroad.

IBTIMES: Isn't Ireland still a popular tourist destination for many Europeans and Americans? Is tourism proving some relief from all the gloomy economic/unemployment news?
RYAN: Not really. Since the high of 2007, tourism numbers fell off markedly in 2009 and 2010 (down 25 percent), due in part to the strength of the euro against Ireland's two major markets - the UK (the pound sterling was down about 33 percent on the euro) and the U.S. (the dollar was down about 10 percent on the euro).
Tourism figures have recovered somewhat in 2011 as the dollar has returned close to its 2007 value against the euro and the pound has appreciated a little (to about 75 percent of its 2007 value).
Costs have also been helped by a cut in the value-added tax on restaurants and other tourist activities, but the minimum wage remains high by European standards, which doesn't help matters.

IBTIMES: Do you get the impression that the Irish regret ever having joined the EU? Or do they still think it was a good idea?
RYAN: No sane Irish person would ever doubt this -- the boom of the 1990s would never have happened if Ireland had not been in the EU and the euro (although the latter might be more contested).
At the time if you were a non-EU company seeking to exploit the EU single market and wanted a well- educated, numerate, relatively cheap work force, whose primary language was English (the language of international business) but who also spoke modern European languages, then Ireland was a complete no-brainer.
Between 1998-2003 Ireland had the largest net foreign direct investment (FDI) flow per capita of any country in the world, four times larger than the UK, five times larger than Germany, 6.5 larger than France and five times larger than Spain.
In absolute terms, tiny Ireland (with a population of less that 4.2 million) was the sixth largest destination for net FDI in the world in 2002 and 2003. In terms of FDI stock per capita Ireland, was second only to Hong Kong.
All the other rationales for the Irish boom don't really hold water. Irish corporate tax rates on overseas companies actually increased in the 1990s compared to the previous two decades (EU law forced them to harmonize overseas and domestic tax rates and EU subsidies/investment were not worth materially more than it had been for the previous 20 years without any great benefits).
FDI (as a result of the EU single market), and a young educated workforce were the keys to the economic prosperity of the 1900s.

IBTIMES: Has foreign investment into Ireland ceased? Isn't the government seeking to cut corporate taxes in order to attract more foreign investors?
RYAN: There has been nearly 70 billion euros worth of investment in the last two years. After the information technology (IT) bubble burst in 2003, FDI into Ireland fell for a number of years, however since 2006; it has been recovering slowly, with the odd blip.
In the last two years FDI inflows equated to 11 percent and 13 percent of GDP, respectively, and currently the stock of FDI in Ireland is 11 percent higher than it was at the height of the IT boom in 2003, and 34 percent higher than in 2000.
The Irish government is struggling to maintain its corporate tax policy in the face of pressure from the EU to increase corporate taxes in line with EU norms. The French are trying to make this a condition of the EU bailout, however, the Irish are resisting strongly. I suspect nothing will come of it in real terms. If the Irish are forced to increase the headline rate, then they will simply start to give allowances for R&D, plant investment etc. Such allowances are normal in the rest of the EU (which makes accurate overall tax burdens difficult to assess) but the Irish run a pretty simple flat-rate system with few exemptions. So if they are forced to increase the headline rate I suspect they will just circumvent it with new, more generous, allowances.

IBTIMES: Can you compare the economic situation in Ireland to Greece? Is the Greek catastrophe worse than Ireland?
RYAN: Greece is completely different, and much worse.
In a nutshell, Greece's problem is that it doesn't and never has had, a reliable and comprehensive tax collection system. Before it entered the Euro it could overcome this by printing Drachmas to fund government spending.
After the introduction of the Euro, Greece struggled to balance its budget, overspending by 5-6 percent of GNP per year resulting in a consistently deteriorating fiscal position. Arguably the EU or at least the banks that were financing this continuing deficit ought to have reacted much earlier to the continuing Greek deficit position.
In Ireland, by contrast, fiscally, it was running a significant budget surplus from 2001 prior to the banking crisis of 2007-2008, had low levels of government debt (24.9 percent GDP in 2007), and had moved into accumulating a significant sovereign wealth fund to pay for future pensions. So Ireland was reasonably fiscally responsible.
Given the healthy budgetary position the Irish government was giving generous public sector wage increases (especially to itself!) and generous welfare benefit increases. Arguably, it should have been more aware of the tenuous nature of some of the fundamentals (particularly its tax incomes relating to property, stamp duty and capital gains) and put more into the sovereign wealth fund for the rainy day.

Nobody, not the EU, the IMF nor the markets had any concerns about the Irish fiscal position prior to 2008.

IBTIMES: Tell me about the Irish banks and the crisis.

RYAN: The Irish problem was related to the exposure of its banks to property loans. The High Street banks had indeed been careless with the amount which they lent to property developers and house buyers (issuing mortgages based on generous income multiples, for example) and this would have caused considerable adjustment problems given the international financial crisis in 2007-2008 even if this had been the only problem.

However, the real problem was a private, non-High Street bank called Anglo-Irish Bank which was entirely exposed, not just to Irish, but to international speculative property deals. Despite its name and head office location, the bank did not have much to do with Ireland, was not funded by ordinary Irish depositors, but rather relied mainly on international financial markets for its funds.

For some reason, which I cannot really explain, instead of backing only the main High Street banks when the crisis broke (which as I said would have imposed some hardship but nothing like the scale of backing Anglo-Irish) and letting what was essentially an internationally-funded speculators bank go to the wall, the government opted to back all Irish banks.

The explanation offered is that they feared that a default on Anglo-Irish would provoke a default on others, even though Anglo's position was considerably more precarious than the others and it was not a high street bank.

Thus it can be argued that the Irish are actually being asked to bail out reckless lending decisions by other international banks who could have and should have paid greater due diligence to whom they were lending. Quite why they are taking this upon themselves I am not sure, it is difficult to see how we can avoid future moral hazard problems in banking if sovereign nations bail out banks in this way, particularly banks which were not part of the ordinary fabric of the financial system.

Put another way, Anglo-Irish Bank is precisely the kind of bank that US and UK regulators wants to separate out from the High Street functions of their major banks, so that it can be excluded from government deposit guarantees. Anglo-Irish already met those conditions and should have been let go to the wall.

All in all, this means that the Irish situations is relatively recoverable, unless the high taxes it has to impose to bail out the banks (repay the IMF/EU) induces enough people to leave for other less taxed countries. If that were to happen then Ireland could go into a downward spiral of emigration of high-skilled mobile employees. In fairness that does not seem to be happening yet, and the recent inflow of new FDI (averaging 12 percent per annum) is an apparent vote of confidence in the country's future.

By contrast Greece and Italy (both with FDI inflows close to 0.7 of a per cent of GDP in the last two years) have much more fundamental problems to address with their public sectors and tax collection systems which may take years to resolve.