- Aug 26, 2011
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.
Farm - Farming - 'Celtic Tiger' did Ireland no favoursIt 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.