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Joining the Euro "a Mistake"--Cooper

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Jun 9, 2007
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18,709
eurocrat said:
toxic avenger said:
Cooper has a weekly column, he was not put up to it by the Sunday Times, he offered his own opinion on a subject for which there is increasing support behind his contention that the Euro is an idealist folly.
:? I never conteded that the Sunday Times put him up to it.

My contension was that it was a terribly article written by a guy with limited grasp of economics who did not even seek to back up any of his opinions by referencing people better placed then him to speak about such a complex area as Commen Currency Areas. As some who is has spent a great deal of their life learning and writing about the subject, it is dispiriting to see some one with such a limited grasp of the issue getting a platform.
And I would argue the reverse, it was an utterly common-sense article, the points being generally irrefutable and obvious to anyone without an ideological agenda. You do not need to have spent your adult life learning about the subject to grasp the stupidity of a one-size-fits-all monetary policy. And as someone who has also studied this, including at college level, I completely agree with him. Economists are not, no matter how much they might like to think they are, infallible and objective 'scientists', their opinions are often glorified guesswork informed by a particular ideological stance.
 


solair

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Mar 30, 2007
Messages
41
As it stands I really don't see how having the IR£ back again would help.

Interest rates are relatively low compared to almost any other time in our history. We're certainly not going to be in a position to stimulate economic growth by lowering them, the Irish central bank doesn't have sufficient clout (even if it were independent) to have that scale of impact thesedays in a globalised credit market.

Also, where do you think the Irish Banks borrow money from? If we had an independent central bank it would be rather a small operation. The banks would still be strongly impacted upon by ECB, Bank of England and Fed shifts in interest rates.

Also, as evidenced by the current crisis, the banks major source of finance is borrowing from other banks and by using the financial markets. The current credit crunch is far outside the control of central banks, even the ECB couldn't really impact upon it.

Finally, are we really that out of synch with the rest of Europe at the moment?
Our growth rate's slowing to a stop, as is much of the continent. Our housing bubble was a little unusual, but it's also shared with Spain (Europe's 4th largest Economy). If anything our housing bubble is no where near as bad as the Spanish one!

The Government could have used other tools to control the bubble, but instead opted for short termism and fanned the flames and over inflated the boom through tax incentives and other schemes. If they'd wanted to slow the sector, stricter borrowing requirements could have been imposed on banks by the Irish Central Bank without any fiscal policy implications. Stamp duty or other new duties could have also been used and proper planning legislation!

What happened in Ireland with the property boom would have happened whether we'd an independent currency or not. FF were in power, they're the political wing of the construction industry and were not prepared to do anything to slow the insane levels of house building that were going on.

If the IR£ was re-introduced and totally independent it would simply be another small currency to be preyed upon by speculators. The main advantage of the Euro has been currency stability. Playing around with the exchange rates to manage the economy is not a solution to pathetic planning policy and bad national financial management.
 

wombat

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32,488
toxic avenger said:
I assume your point is that between breaking with Sterling and binding into the ERM there was no opportunity for independent regulation.
No, my point is that the people who gave us the property bubble would be unable to manage an independent currency.
 

factual

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Re: Joining th Euro "a Mistake"--Cooper

droghedasouth said:
factual said:
kerrynorth said:
Unfortunately Matt is hitting the wrong target here. The Euro of itself is not the problem, the problem is the failure of government to use fiscal policy in a way that complements the prevailing monetary policy rather than acts totally contrary to it. In short, as low ECB interest rates and an export accommodating exchange rate were aggressively over stimulating the economy not only should the government have not have been adding fuel to the fire with massive increases in public spending and cuts in taxation they should have increasing taxation and reigning in spending.

The economic failure we are now experiencing is a failure of economic management over the past decade. Not the Euro pre se.
But we have generally not used fiscal policy in this way. You cannot turn on and off motorway expenduture as befits the macroeconomic changes. Monetary policy is the best tool for countercyclical stabilization policy. And that tool we have thrown away (despite Sinn Féin's warnings, which have turned out true).
Hilarious to see SF espouse monetary theory - rather conflicts with the usual left-wing twaddle that passes for SF economic policy.
Ye have been hanging round with the Brits for far too long.
Next you will be inviting Margaret Thatcher to do the keynote address at Bodenstown.
The present government is actually ramping DOWN government spending at a time when we are entering a recession. Not very bright from a countercyclical stabilisation point of view especially when the monetary policies are not available to offset.

The joining of the Euro means one cannot adjust ones competitiveness. Our prices and wages are very high in real exchange rate terms. The only way to restore competitiveness is a painful deflation and we all know that will take a long time. Compare that with the stimulating effect of a realingment of currencies and the loss of monetary policy is a very serious matter, not least for the unemployed.

Sinn Féin understood the importance of keeping monetary policy in Irish hands for countercyclical stablilsation policy and at last it seems a number of people are beginning to realise Sinn Féin were right on that.

And finally just because you believe in retaining monetary policy tools for countercyclical stablilsation policy in local economies does not make you a monetarist in the sense of Milton Friedman. It is true that a policy must not be inflationary and as such I would argue that Ireland should have an independent central bank with an inflation and stability target. Its also true that using fiscal policy (e.g. ramping up government spending) to stimulate the economy is discredited.
 
Joined
Jun 9, 2007
Messages
18,709
wombat said:
toxic avenger said:
I assume your point is that between breaking with Sterling and binding into the ERM there was no opportunity for independent regulation.
No, my point is that the people who gave us the property bubble would be unable to manage an independent currency.
Perhaps, but at least we'd have the opportunity to make them pay. They might be in hock to vested interests, and riddled with corruption, but at least they're our gombeen idiots, whom we have the opportunity, whether taken or not, to hold to account.
 

LooseCannon

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Joined
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Messages
261
Kerrynorth - please repeat posting here until the loolahs begin to realise that the Irelands problems are nothing to do with the EU and were completely home made.
(Thanks Bertie, cretin McCreevey and all the FF voters)
 

wombat

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toxic avenger said:
Perhaps, but at least we'd have the opportunity to make them pay. They might be in hock to vested interests, and riddled with corruption, but at least they're our gombeen idiots, whom we have the opportunity, whether taken or not, to hold to account.
In the meantime, we pay 50punts/litre for petrol.If they had control of the currency it would be managed in the interest of their cronies in the property business. In theory, control of the currency would be good but in practice, we should look at Argentina, not Switzerland.
 
Joined
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Messages
18,709
LooseCannon said:
Kerrynorth - please repeat posting here until the loolahs begin to realise that the Irelands problems are nothing to do with the EU and were completely home made.
(Thanks Bertie, cretin McCreevey and all the FF voters)
I think a quick re-read of my posts will leave you in no doubt whatsoever of my atitude to FF and its croneyism, often corruptly inspired. It is logically possible to hold that stance and to still believe in the folly of a European 'one-size-fits-all' monetary policy, and to comment that the lack of accountability of those who frame that policy is not a good thing. If you think that makes me a loo-lah, then you have more in common with Ahern than I do...
 
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Messages
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wombat said:
toxic avenger said:
Perhaps, but at least we'd have the opportunity to make them pay. They might be in hock to vested interests, and riddled with corruption, but at least they're our gombeen idiots, whom we have the opportunity, whether taken or not, to hold to account.
In the meantime, we pay 50punts/litre for petrol.If they had control of the currency it would be managed in the interest of their cronies in the property business. In theory, control of the currency would be good but in practice, we should look at Argentina, not Switzerland.
That might be the case with the current shower, but it does not invalidate my point. The monetary union is massively ill-conceived, driven by an utterly absurd integrationist ideology, soon to be followed by fiscal union, and we are sleepwalking into economic irrelevance. Decisions will be made for the benefit of continental Europe, France and Germany in particular, and we can do nothing. It's crazy, and hardly anyone sees it.
 

factual

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Joined
Feb 5, 2005
Messages
8,723
toxic avenger said:
wombat said:
[quote="toxic avenger":ikbb9xn7]
Perhaps, but at least we'd have the opportunity to make them pay. They might be in hock to vested interests, and riddled with corruption, but at least they're our gombeen idiots, whom we have the opportunity, whether taken or not, to hold to account.
In the meantime, we pay 50punts/litre for petrol.If they had control of the currency it would be managed in the interest of their cronies in the property business. In theory, control of the currency would be good but in practice, we should look at Argentina, not Switzerland.
That might be the case with the current shower, but it does not invalidate my point. The monetary union is massively ill-conceived, driven by an utterly absurd integrationist ideology, soon to be followed by fiscal union, and we are sleepwalking into economic irrelevance. Decisions will be made for the benefit of continental Europe, France and Germany in particular, and we can do nothing. It's crazy, and hardly anyone sees it.[/quote:ikbb9xn7]

Sinn Féin can see it. In fact, Sinn Féin was the only major party to stand against Euro entry in the referendum campaign.
 

droghedasouth

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May 10, 2007
Messages
1,091
Re: Joining th Euro "a Mistake"--Cooper

factual said:
droghedasouth said:
factual said:
kerrynorth said:
Unfortunately Matt is hitting the wrong target here. The Euro of itself is not the problem, the problem is the failure of government to use fiscal policy in a way that complements the prevailing monetary policy rather than acts totally contrary to it. In short, as low ECB interest rates and an export accommodating exchange rate were aggressively over stimulating the economy not only should the government have not have been adding fuel to the fire with massive increases in public spending and cuts in taxation they should have increasing taxation and reigning in spending.

The economic failure we are now experiencing is a failure of economic management over the past decade. Not the Euro pre se.
But we have generally not used fiscal policy in this way. You cannot turn on and off motorway expenduture as befits the macroeconomic changes. Monetary policy is the best tool for countercyclical stabilization policy. And that tool we have thrown away (despite Sinn Féin's warnings, which have turned out true).
Hilarious to see SF espouse monetary theory - rather conflicts with the usual left-wing twaddle that passes for SF economic policy.
Ye have been hanging round with the Brits for far too long.
Next you will be inviting Margaret Thatcher to do the keynote address at Bodenstown.
The present government is actually ramping DOWN government spending at a time when we are entering a recession. Not very bright from a countercyclical stabilisation point of view especially when the monetary policies are not available to offset.

The joining of the Euro means one cannot adjust ones competitiveness. Our prices and wages are very high in real exchange rate terms. The only way to restore competitiveness is a painful deflation and we all know that will take a long time. Compare that with the stimulating effect of a realingment of currencies and the loss of monetary policy is a very serious matter, not least for the unemployed.

Sinn Féin understood the importance of keeping monetary policy in Irish hands for countercyclical stablilsation policy and at last it seems a number of people are beginning to realise Sinn Féin were right on that.

And finally just because you believe in retaining monetary policy tools for countercyclical stablilsation policy in local economies does not make you a monetarist in the sense of Milton Friedman. It is true that a policy must not be inflationary and as such I would argue that Ireland should have an independent central bank with an inflation and stability target. Its also true that using fiscal policy (e.g. ramping up government spending) to stimulate the economy is discredited.
Contrary to popular belief, expenditure is increasing.
Jan-Jone 2008 = Jan-June 2007 + 11%
They will borrow as much as they can get away with (more than 3%) to keep government spending up.

SF's economic analysis is mildly hilarious.
Considerable money laundering skills do not automatically make them high priests of high finance.

In your paradise where we have for the first time in our history an independent currency, would you have an independent central bank or should the democratically elected representatives of the people keep control of interest rate and monetary policy.?

Would you have a trade weighted float or try to shadow the current lowest currency between the Euro, Sterling and Dollar?
 

wombat

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Re: Joining th Euro "a Mistake"--Cooper

droghedasouth said:
Would you have a trade weighted float or try to shadow the current lowest currency between the Euro, Sterling and Dollar?
You left out the new Zimbabwe Mugabe.
 

Coleman

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Joined
Jul 1, 2008
Messages
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factual said:
A leading writer has come out today to argue that joining the Euro was a mistake as Sinn Féin astutely foresaw it would be.

Without saying "I told you so" Sinn Féin was the only party to oppose Euro membership and many of the arguments that Sinn Féin used were dismissed at the time but have come to be seen as true by people such as Cooper.

Basically we have given up our exchange rate--which prevents us from becoming competitive again without years of painful deflation. This one could take a long time folks and I am not happy at all about that despite Sinn Féin having been proven right. In the end as usual the least well off will suffer most from the downturn.

Cooper argues here:

http://www.timesonline.co.uk/tol/comment/article4406818.ece
Barroso's economic advisor, Professor Paul de Grauwe, believes that, "the euro will collapse without political union." He argues that the euro has already damaged Italy's economy and is currently damaging Spain's. Without political union, he maintains, the euro will collapse in ten to twenty years. He acknowledges that attempts at political union have failed and that this endangers the euro. Check out his website.
 

droghedasouth

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Messages
1,091
Coleman said:
Barroso's economic advisor, Professor Paul de Grauwe, believes that, "the euro will collapse without political union." He argues that the euro has already damaged Italy's economy and is currently damaging Spain's. Without political union, he maintains, the euro will collapse in ten to twenty years. He acknowledges that attempts at political union have failed and that this endangers the euro. Check out his website.
He may well be right from a purely technical point of view that the transfers from one region to another of the scale comensurate with political union may be needed in the long term, not because the currency would fail but the required political support might evaporate in a state that suffers a very prolonged depression. At the same time the EU was always good at coming up with strucural funds, cohesion funds etc the scale of which were quite significant in our national accounts.

As regards, Ireland, Italy and Spain don't underestimate the ability of the national government to screw up.
After all, it is not as if they weren't capable of screwing up before the Euro.

And for those addicted to sovereignty, the scale of the UK's problems in spite of its much vaunted prudence and independent Bank of England, shows that maybe the Euro is not so stupid after all.
 

wombat

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I just read Cooper's article and thought it was very poor, some of the postings on this site are more reasoned and no one got paid for them. I still have no confidence that an independent currency in the hands of Cowen & Lenihan would be an improvement on a Euro in the hands of the ECB. The other point I would make is that withdrawing from the Euro would attract the attention of currency speculators, its one thing never to have joined, withdrawing is a different story.
 

dub006

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Apr 6, 2007
Messages
212
spreads on government bonds are widening between the likes of germany and the outlying states such as Ireland Greece spain and italy.

In essence this means that lenders of money to these countries value a german euro mor than an Irish euro.

Stress on the outlying countries will build faster now with approaching recession.The next three years will be critical for the euro.
 

goosebump

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May 23, 2008
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wombat said:
I just read Cooper's article and thought it was very poor, some of the postings on this site are more reasoned and no one got paid for them. I still have no confidence that an independent currency in the hands of Cowen & Lenihan would be an improvement on a Euro in the hands of the ECB. The other point I would make is that withdrawing from the Euro would attract the attention of currency speculators, its one thing never to have joined, withdrawing is a different story.
In a small open economy, inflation and currency/interest rate stability are far more important than the value of its currency. That's why we joined the Euro.

The idea that you can alter the course of your economy by adjusting your exchange rate is fanciful. A weak currency imports inflation, a strong currency exports it, and if this was something you were prone to do, your currency would be wiped out by speculators in a matter of weeks.
 

The Trinity Politick

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Sep 30, 2006
Messages
248
Ireland never followed a truly independent monetary policy so i have no idea where people are getting a hump about the € all of a sudden...

We were pegged to the £Sterling until 1976 at which point we switched (like most of Europe) to shadowing Bundesbank policy and thus the more stable Deutsmark.

Changing the 'Punt' for the single European Unit (Euro) was just a baby step compared with previous actions we made. Some people on here are getting far too excited about European matters....
 

MookieBaylock

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eurocrat said:
Wow, that is a shockingly poor article from Copper. He is not an economist, nor does he quote even one economist to to supports his 'arguments'. I hope next week we get to read a rebuke by his counterpart Michael Lyster. Perhaps Marty Morrisey could also weigh in the merits or demerits of an Optimal Currency Area.

It is so painful from someone trained in Economics to see this kind of dribble being published by a non expert. There are plenty of economists out there that the Times could employ to write an intelligent article on Ireland's Eurozone membership. Its a pity Copper was the best they could be.
Why would the British Sunday Times want an intelligent article? They are merely pushing their own agenda..
 

MookieBaylock

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403
forest said:
the uk press are easing on what they view an opportunity to inbed the same style Euroscepticism crap here as they did in the UK
We need to stop them
Very simple remedy to this. Ban foreign ownership of media like Austria do.. they whoa-la.. they're gone.
 


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