FACTBOX-Ireland and the credit crisis

Feb 11 - Here are some key economic developments in Ireland in the past two years.

- Irish house prices fall in March 2007 for the first time in five years, harkening the end of a property bubble that helped drive a decade of rapid growth and aided Ireland's transformation from one of Europe's poorest countries to one of its richest.

It also marks the beginning of a steady and sharp decline in bank shares as fears mount over the extent of banks' exposure to the property sector.

- The malaise deepens, worsened by growing numbers of jobless people. In June 2008, government-funded research body ESRI predicts that the former "Celtic Tiger" will see its first recession since 1983.

- The worsening global financial crisis is taking its toll on Ireland's open economy. Public finances shrink. The government announces in September 2008 that it will bring forward its budget by two months to October to boost flagging business and consumer sentiment.

- Government data in September show that Ireland is the first euro zone country to slide into recession, with a 0.8 percent annual contraction in the second quarter.

- Ireland becomes one of the first countries to respond to the Lehman Brothers collapse, guaranteeing some 440 billion euros ($583 billion) of liabilities at six Irish-owned institutions and a foreign-owned bank with operations in Ireland.

This prompts similar actions across Europe, as governments move to prevent capital outflows to Ireland.

- Ireland raises taxes and reins in spending in the October budget, but predicts its budget deficit will smash EU limits by more than double. Pensioners demonstrate against the cuts and around 40,000 people protest reductions in education spending.

- In mid-December, the government says 2009 could produce Ireland's worst recession on record with a possible contraction of 4 percent in the country's economic activity.

- Ireland says in December that it will inject 5.5 billion euros into the country's three main lenders, and that it will underwrite Bank of Ireland and Allied Irish Banks' plans to raise 1 billion euros each. Officials predict later in the month that Ireland might need to borrow as much as 20 billion euros in 2009 to help cover the country's ballooning deficit.

- Dell, the world's second-biggest PC maker and Ireland's biggest exporter, says it is moving its European manufacturing base to Poland from Limerick in the west of Ireland, becoming one of the biggest multinationals to retrench because of high labour costs.

- Ireland says it does not expect to return to growth until 2011, while forecasting that its budget deficit will not meet EU limits until 2013. This year's budget shortfall is expected to be 9.5 percent of gross domestic product.

- Standard & Poor's warns Ireland it could cut its prized AAA sovereign debt rating due to mounting fiscal pressures, deepening recession and exposure to the banking sector.

A similar warning is later issued by Moody's. Ireland is viewed as the riskiest issuer of government debt in the euro zone, according to credit monitor CMA DataVision.

- The government says nationalising Anglo Irish Bank is the only option given its importance to the economy.

- Ireland says it will introduce a pension levy on public-sector workers, freeze their pay and cut capital spending to reduce public spending.

- The number of people in Ireland claiming unemployment benefits rises in January 2009 to the highest monthly level since records began in 1967. This works out to about 1,500 people signing on for benefits every working day in January.

- Bank and insurance group Irish Life & Permanent discloses that it transferred large amounts of money to Anglo Irish Bank in September 2008 to provide "exceptional support" at a time when the world's financial sector was being clobbered by the collapse of Lehman Brothers. A source close to the matter says the deposits were in the 6 billion to 7 billion euros range.

- Ireland's Finance Minister Brian Lenihan admits in parliament that he did not know about the deposit by Irish Life & Permanent into Anglo Irish until last month because he had not read in full a report about the lender's finances, delivered to his department last October. Lenihan says huge reputational damage has been done to Ireland.

- The government announces a beefed up bank bailout package with a pledge to inject 7 billion euros into the country's two top lenders -- Bank of Ireland and Allied Irish Banks -- in return for guarantees on lending, executive pay and mortgage arrears.