Gauck in Ireland

Just as Ireland was the first country to enter into a European bailout, so too was it the first country to successfully leave one.

From 2008 to 2010, Dublin's finances skidded out of control after a huge real estate credit bubble burst. Grossly inflated housing prices plummeted and banks' balance sheets were suddenly wiped clean.

In 2008, the Irish government made the fateful decision to bail out its banks, a move that quickly proved to be too heavy a burden.

Financial markets also gave their thumbs-down. Interest rates on Irish sovereign bonds rose to exceed 14 percent, pushing the country into a debt spiral that would have led to its bankruptcy had it not sought protection by refinancing its debts under EU and IMF bailout programs.

To refinance its debt and keep up with payments, the Irish government took up loans from the EU and International Monetary Fund (IMF) totaling 68.2 billion euros ($75.6 billion). In exchange, it agreed to sweeping reforms and austerity measures.

Those reforms were similar to the ones being demanded of Athens now. They included increasing value-added tax and making drastic cutbacks in public expenditures. They also entailed shrinking civil workers' salaries, social services and welfare payments - exactly the kinds of cutbacks that Greeks rejected in their referendum more than a week ago.

Austerity paid off

In 2010, Ireland's annual deficit exceeded 30 percent of the country's gross domestic product (GDP), a ten-fold overshoot of the EU's rule that deficits shouldn't exceed 3 percent. By 2014, the government budget deficit had dropped to 4.2 percent of GDP. A small primary surplus is expected for the current year.

That belt-tightening á la EU stipulations won Dublin accolades in Brussels and has been cited in the ongoing debate over Greece's finances as a vindication for calls for more austerity from Athens.

The Irish may be paying new social security contributions, new taxes on their homes and additional income tax, but the tough economic and fiscal measures have generated results in the country's credit rating.

Five weeks ago, ratings agency Standard & Poor's (S&P) raised Ireland's rating from A to A+, the fourth-highest rating in S&P's system. It's the same rating S&P has assigned to Israel and South Korea. S&P said the outlook for Ireland's rating was stable, and the ratio of debt-to-GDP should fall more quickly than had been expected.

Sympathy for Greece

Ireland had exceeded its budgetary targets since December 2013, when it ended its three and a half years under the EU and IMF bailout package. In 2015, the deficit is expected to fall to 2.8 percent, according to S&P projections. The main reason: tax revenues have been rising faster than expected, mostly due to robust growth in domestic demand.

However, Ireland, like Greece, has a very heavy debt burden, one that could prove too heavy in the long run. Every year, Ireland pays out twice as much in debt servicing costs as it does in infrastructure investments.

With the memory of austerity still fresh, Irish citizens have a lot of empathy for the Greeks and their debt crisis. There's a widespread consensus in Irish media that Greece should be given some relief from its debt burden.

The Irish government, however, is less understanding. In official circles in Dublin, the attitude seems to be: Ireland had to weather austerity, so Greece should too.