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Joining the Euro-Ireland's big mistake


parentheses

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An article here by Colm McCarthy. I think there's no doubt McCarthy now regards the decision to join the Euro as a big mistake. He says the period of the true "Celtic Tiger" ended around the time we joined the euro-from then on economic growth was relying on a credit bubble.

The decision to join the ill-fated European common currency in 1999, supported unanimously by all political parties and interest groups but queried at the time by several economists, has clearly made things worse.

The bubble would have happened anyway given the atmosphere of the time but it would have deflated sooner under an independent currency.
The banks would have found it far more difficult to swell their balance sheets through foreign borrowing outside the deceptive comfort blanket of the Euro. Just as importantly, the government would have had broader policy options in dealing with the fallout when the banking crisis emerged.
Unfortunately there is no possibility of simply winding the clock back. It makes no sense to talk of exiting the Eurozone at this stage, even though it should now be acknowledged that those small EU countries which stayed out, such as Denmark and Sweden, dodged a falling knife.
It would be advisable though to consider whether the option of an independent currency can somehow be re-created should France and Germany do no better second time round.
Farm - Farming - 'Celtic Tiger' did Ireland no favours
 


Aindriu

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It was a huge mistake. We wouldn't be the way we are now if we had not joined.
 

Tea Shark

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Definitely. The one thing England have been very right on. It was a cop out disguised as a cop in.
 

RobertW

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Definitely. The one thing England have been very right on. It was a cop out disguised as a cop in.
Give over. The UK is in as great a mess as this country with their projected debt to be about 1,400-1,500 billion pounds by 2015.
 

Tea Shark

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Give over. The UK is in as great a mess as this country with their projected debt to be about 1,400-1,500 billion pounds by 2015.
Better terms.
 

Analyzer

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Probably the biggest stragetic blunder of the Irish state.

And it occurred because we had no strategy at all - except to go along with somebody else's plan, without doing any thinking.

The blunder was not having any strategy.
 

RobertW

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The euro is a currency. That's all.

Since the 1980s countries in the west have been borrowing and living beyond their means.

This country spends over half its income from taxation on social welfare. . . This is unsustainable and it has nothing to do with the euro and everything to do with politicians using the welfare state to buy votes.
 

Analyzer

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Give over. The UK is in as great a mess as this country with their projected debt to be about 1,400-1,500 billion pounds by 2015.
They would have done fine were it not for Phony Tony and Flash Gordon.
 
M

MrFunkyBoogaloo

I don't agree with McCarthy here however...

Unfortunately there is no possibility of simply winding the clock back. It makes no sense to talk of exiting the Eurozone at this stage, even though it should now be acknowledged that those small EU countries which stayed out, such as Denmark and Sweden, dodged a falling knife.
Over the next couple of years, some form of Eurozone mark II will emerge, engineered largely by France and Germany, the unrepentant architects of the flawed Eurozone mark I. Ireland will have no influence on the form that Eurozone mark II will take, the inevitable fate of small countries in these situations.

It would be advisable though to consider whether the option of an independent currency can somehow be re-created should France and Germany do no better second time round.
I'd say, knowing that, it makes perfect sense.
 

RobertW

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Better terms.
During the Great Depression – when thousands of ordinary people lost everything – America’s total debt hit 252% of GDP.

During the Japanese economic collapse – which triggered more than two decades of deflation and a 75% drop in the stock market – Japanese total debt hit 498% of GDP.

Today, Britain’s total debt equals 900% of the economy.
 

parentheses

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T
This country spends over half its income from taxation on social welfare. . . This is unsustainable and it has nothing to do with the euro and everything to do with politicians using the welfare state to buy votes.
But it was the credit bubble resulting from the euro which enabled the politicians to ramp up public spending. All that borrowed money in the economy could be taxed and spent by them.
 
M

MrFunkyBoogaloo

Probably the biggest stragetic blunder of the Irish state.

And it occurred because we had no strategy at all - except to go along with somebody else's plan, without doing any thinking.

The blunder was not having any strategy.
I disagree. I think there was a strategy. One based on an ever-closer union.

But yes, a massive blunder.
 

RobertW

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But it was the credit bubble resulting from the euro which enabled the politicians to ramp up public spending. All that borrowed money in the economy could be taxed and spent by them.
Bertie would love that. . ."it was the euro wot made me do it"

Nothing summed it up as disgracefully as the SSIA scheme.

It's true. A false economy was created using other people's money. That's nothing got to do with the euro.
 

TheWexfordInn

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Cameron has borrowed more than Blair and Brown combined and he's only in power 2 and a half years.
This is a petty point-scoring argument. In the same way that the Major government left the incoming Labour government with an economy on an upward trajectory such that Gordon Brown recorded a surplus in Labours early years without actually doing anything the Labour government left the incoming Conservative government with an economy hurtling downwards so that the incoming government would unavoidably run massive deficits irrespective of what policies they adopted. The test of the Cameron government is what state the finances are in after they have had their hands on the tiller for the 13 years that Labour had, thats if they are given the chance.
 
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Analyzer

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Cameron has borrowed more than Blair and Brown combined and he's only in power 2 and a half years.
They left him a collection of insolvent banks. RBoS in particular.

They were the same as Bertie and Biffo. Have a boom based on debt accumulation, then stick the bill to the taxpayers, and then get kicked out.
 

RobertW

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This is a petty point-scoring argument. In the same way that the Major government left the incoming Labour government with an economy on an upward trajectory such that Gordon Brown recorded a surplus in Labours early years without actually doing anything the Labour government left the incoming Conservative government with an economy hurtling downwards so that the incoming government would unavoidably run massive surpluses irrespective of what policies they adopted. The test of the Cameron government is what state the finances are in after they have had their hands on the tiller for the 13 years that Labour had, thats if they are given the chance.
Its still impressive for Cameron to borrow more in 30 months than Blair and Brown did in 156
 

Catalpast

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An article here by Colm McCarthy. I think there's no doubt McCarthy now regards the decision to join the Euro as a big mistake. He says the period of the true "Celtic Tiger" ended around the time we joined the euro-from then on economic growth was relying on a credit bubble.







Farm - Farming - 'Celtic Tiger' did Ireland no favours
That's it in a nutshell

The real 'Boom' ended in 2000-2001

The Euro masked the bubble

- till it Burst!:shock:
 

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