Lisa O'Carroll introduces a new Guardian blog following the story of Ireland's financial troubles and the measures being put in place to rescue the troubled economy

Grand Canal Square in Dublin epitomises Celtic Tiger developments with a new Daniel Libeskind theatre and Martha Schwartz-designed plaza

In the mid-noughties, Ireland was the darling of Europe – the Celtic Tiger, a model economy for small nations around the world. Centuries of emigration was reversed with hundreds of thousands of workers flocking in from eastern Europe and beyond and former sons and daughters returning from abroad. It was booming and awash with cash.

The average age of cars on the road in 2007 was just three years old. The country had the highest number of helicopters per capita in Europe, thanks to cheap finance which bankrolled 10 years of buccaneering property development at home and abroad.

Dublin quickly became a Little Dubai with shiny new office blocks, five-star hotels, wonderful statement buildings and a rash of apartment complexes. Elsewhere, the Irish made serious trophy acquisitions, buying up large swathes of Knightsbridge, Regent Street, Bond Street, Canary Wharf, Bucharest and Shanghai. The Irish had conquered the world.

So when the financial crash came in 2008, it hit Ireland harder than most. The country's economy had been built around a property boom. Now it is close to bankruptcy. The weekend papers have been dominated by the country's fight against a Greek-style bailout from Europe and the IMF.

Yesterday, in the picturesque town of Kilkenny, experts from all over the world gathered to discuss the crisis at an economics festival. There was no sense that Ireland could survive without external help.

"The IMF is a bad word in Argentina and when it becomes a household name in Ireland, this is bad news," said the former economics minister of Argentina, Martin Lousteau.

He warned that the biggest mistake Ireland could make would be to go bust and not do something to change the underlying causes of the crisis.

Put another way: "It sounds like Ireland is drowning but all you are doing is describing the water not taking action." The words of London-based investment banker Vikas Nathas.

Ireland is now on tenterhooks and the coming weeks which include a by-election, the unveiling of a four-year fiscal plan and a brutal budget in December, will be critical.

The government is deeply unpopular and morale is at rock bottom. And no wonder. It would truly be a sad day for a nation that has fought so hard for its independence back in 1916 to welcome what will be called an "IMF Mission".

Personally, it is also cause for reflection. I was one of the last batch of émigrés leaving Dublin in 1987, and I have spent most of my working life in London, working at news organisations including the Guardian where I was launch editor of Mediaguardian.co.uk.

From afar, I watched my home country blossom into a place oozing with self-confidence and able to punch above its weight on the international markets. Now it is on its knees. And the country's twenty-somethings have little option but to emigrate. As Peter Casey, 26, told me last week: "Why should we stay and pay for someone else's mess?"

It is an extraordinary tale and in this new blog we will track the latest developments as they unfold.

Tomorrow, we will bring you more from Martin Lousteau, the former economics minister of Argentina. He recalls the financial catastrophe of 2001/2 which led to rioting, looting in supermarkets, six deaths and four presidents in one week.

Over the coming weeks, this blog we will also be looking at the human cost of the crisis – the emigration, the unemployment, the every day struggles of small business.

We have two esteemed academics on board to help decipher the finances: Brian Lucey associate professor of finance at the Trinity College Dublin school of business and Stephen Kinsella,an economist at the University of Limerick. They will guest blog regularly, starting this Wednesday.

We also have the secret diary of a businessman, aged 38 and a half. He was a Celtic Tiger success and made significant money from property. But he saw the writing on the wall and in late 2009 made a move into the retail business. He'll tell it like it is week by week. But we also want to engage with you and expect the usual lively debate on blog comments. You can also get in touch directly, in confidence, if you have a story to share or want to volunteer a guest post. Just email me at guardian.dublin@gmail.com.

2.30pm update:

On the issue of whether Ireland needs a bailout, the story is developing. One of the government's most senior ministers went on the attack at lunchtime today declaring unequivocally that Ireland does not need a bailout, and attacking the media speculatilon. He said continued misinterpretation of the facts was "very damaging" to the country.

In an interview on RTE at lunchtime, minister for state for Europe, Dick Roche, said: "It is not a just a question of national pride or being pig-headed, it would not be a good thing to go running to the IMF when there no need to do so. Ireland is well funded."

But opposition spokesman Michael Noonan said he thought there was "substance" to the international stories. He said Europe is pushing agenda because the government had made such a "fiasco" of the bank crisis.

More on this in the coming days.