One of the lessons learned from the Irish financial crisis was surely that it was risky to be a partitioned island in the Eurozone with a big financial sector. You would think that is a lesson along the lines of America deciding that the lesson of Vietnam was to not get involved in another war in Vietnam, but Cyprus managed to prove that even small samples can have more than one element.
Anyway, most of the Ireland-Cyprus comparisons in the run-up to the bailout has focused on the similar in forcing mechanism of the European Central Bank messages to the governments, namely that the ECB would withdraw its support (or its facilitation) to each country's banking systems unless they came to terms on a bailout deal with the EU and the IMF.
There's another similarity. The current standoff with Cyprus is partly due to the EU-IMF requirement that Cyprus come up with about a third of the money from domestic resources, which by the logic of the situation means a partial appropriation of deposits. It's lost in all the plaudits that Ireland now gets but it likewise was required to put up its own money as part of its 2010 bailout. Here's the IMF's Dominique Strauss-Kahn
describing the deal:
A financing package of €85 billion (about US$113 billion) will support Ireland’s effort to get its economy back on track. Of this, the European Union and bilateral European lenders have pledged a total of €45.0 billion (about US$60 billion). The Irish authorities have decided to contribute €17.5 billion to this effort from the nation’s cash reserves and other liquid assets.
Then finance minister Brian Lenihan was even more effusive
about the nation's own contribution --
Furthermore, the State is in the happy position of being able to contribute €17.5 billion towards the €85 billion from its own resources, including the National Pension Reserve Fund. It can do this without prejudicing the commitments in the four year plan to use funds from the NPRF for projects such as the water metering programme and retrofitting.
This use of the NPRF has provoked the most bewildering criticism of all from parties who, having for years fundamentally disagreed with the very existence of the Fund, have now become its most ardent protectors. And on this point the arguments make absolutely no sense. Why would we borrow expensively to invest in our banks when we have money in a cash deposit earning a low rate of interest? And how on earth can we ask tax payers in other countries to contribute to a financial support package while we hold a sovereign wealth fund? We have a large problem with our banks which has forced us to seek this external assistance. In these circumstances, it is surely appropriate that our cash reserves should be deployed to help solve that problem
What's not clear is exactly how much choice Ireland had in the matter. Was, like Cyprus, Ireland told that finding a substantial chunk of own-funding was a condition of its bailout? And if so, why was the choice made that it could be from the pot that was pre-funding future pensions, as opposed to, say, haircutting large depositors or, God forbid, senior unsecured bondholders in busted banks? It's just another of the lingering mysteries of the Irish economic crisis.