Sweden and the euro

dathi1 · 04-09-2003 10:46am #1

Considering our slide into sh.ite since we joined the euro do you think the Swedes will make the same mistake?
With the sharp decline in interest rates here and depreciation of the euro against the dollar and sterling during 1999 and 00 undoubtedly contributed to the overheating of the economy leading to a sharp rise in house prices added to general inflation and pressures in the economy, our own central bank could have successfully delivered a more stable economy with lower inflation.

bloggs · 04-09-2003 11:15am

I don't blame the Euro for our down turn, i blame the economic policies of the government (what policies you say), and the global down turn. The thing is there are both economic benifits and problems with the euro, as there are with staying with your own currency.

Sparks · 04-09-2003 1:36pm

I can't see Sweden using the euro. There's too much nickel in it, apparently....

ReefBreak · 04-09-2003 3:42pm

Originally posted by dathi1
Considering our slide into sh.ite since we joined the euro do you think the Swedes will make the same mistake?
With the sharp decline in interest rates here and depreciation of the euro against the dollar and sterling during 1999 and 00 undoubtedly contributed to the overheating of the economy leading to a sharp rise in house prices added to general inflation and pressures in the economy, our own central bank could have successfully delivered a more stable economy with lower inflation.

Anyone who thinks the Euro is to blame for the Irish downturn needs to learn the basics of Economics. The downturn was due to cyclical effects of a Globalised economy - and Ireland is more vulnerable than most due to it's very open nature. In these conditions, there is little the government could do. However, a recent ESRI report has shown that the Irish economy has held up very well in the face of massive pressures from abroad - unemployment has stayed fairly low, and consumer spending has remained quite high. Those who think this economy is in the sh1t are slightly overstating it.

dathi1 · 04-09-2003 4:00pm

Anyone who thinks the Euro is to blame for the Irish downturn needs to learn the basics of Economics.

tee hee....absolutely....but could we have managed our situation better if we had stayed with the punt ?...as for the unemployment situation and government spin try telling that to the gang at 3com in blanch this morning.

bloggs · 04-09-2003 4:12pm

what did that fat ugly cow harney have to say for the loss of 600 jobs in Blanch this morning?

ReefBreak · 04-09-2003 4:25pm

Originally posted by bloggs
what did that fat ugly cow harney have to say for the loss of 600 jobs in Blanch this morning?

Well, she waved her magic wand, and all of a sudden the global downturn in the IT and Communications sectors was reversed and they all went back to work in 3Com, just like that. Why didn't she magically change the global IT&C economy sooner? Well, I guess she just couldn't be bothered. Then Santa Claus arrived and, etc, etc.

ReefBreak · 04-09-2003 4:47pm

Considering how the topic title concerns the Euro, do you really believe that Ireland not entering the Euro would save the jobs at 3Com? You take the good with the bad when you deal with the Euro, and I believe the good will always outweigh the bad where the Euro is concerned. This will especially be the case when Britain (hopefully) signs up.

bloggs · 04-09-2003 4:54pm

if we had the punt we would probably see the government thowing away millions in an attempt to devalue it, to increase competitiveness (Norman Lemont 1992 comes to mind)

dathi1 · 04-09-2003 5:36pm

do you really believe that Ireland not entering the Euro would save the jobs at 3Com?

No...but it piddles me off when politicians over simplify their campaigns like saying the Euro will bring Jobs and prosperity..or Vote yes to Nice for jobs! Considering Sterling zone employment is on the way up it makes for interesting times.

Victor · 04-09-2003 7:39pm

Our problem was out economy (as with that of the Netherlands, Spain and Sweden) was growing strongly and we joined the Euro at too high a rate, instead of £0.787564/€ it should have been £0.75/€ to £0.70/€ or lower. But German pride prevented this.

The fall in the value of the euro combined with (interlinked) very low interest rates (to encourage investment in especially Germany and France) put out economy into overdrive as our products were cheap on the American market and investing here was cheap. Sweden wasn't happy with being in this potential scenario and kept out. When the Swedish and Eurozone economies become closer aligned, I imagine they will join.

IDM · 05-09-2003 5:41am

Had lunch with a friend of mine who works at the Swedish embassy in Washington DC. Just yesterday, the referendum voting for absentees was performed. He mentioned that pretty much everyone was voting yes for the euro.

I wonder how the poll will turn out.

05-09-2003 9:24am

Originally posted by dathi1
No...but it piddles me off when politicians over simplify their campaigns like saying the Euro will bring Jobs and prosperity..or Vote yes to Nice for jobs! Considering Sterling zone employment is on the way up it makes for interesting times.

Not true according to leading U.K research.

the Employment picture {for the U.K} is not so encouraging.The slowdown in household expenditure across many U.K regions and continuing weakness in foreign demand means that,in most cities the increase in service sector jobs barely offsets the fall in manufacturing.For Glasgow in particular,large job losses in electronics are expected to lead to net job losses for the forecast period as a whole.

According to that survey for instance,with regard to European cities, Dublin is in the top three, whereas London is placed firmly near the bottom.

mm

dathi1 · 05-09-2003 9:57am

or you could google these:
http://home.eircom.net/content/irelandcom/topstories/1193532?view=Eircomnet
and
http://www.manpower.co.uk/news/pressrelease74_mainpage.asp
although figures look rosey so far as "rate of employment" (canbridge) is concerned London is bottom of the heap anyway.

05-09-2003 12:14pm

It would be an oversimplification in the extreme to think that a fluctuating Irish pound outside the Euro would deliver better results than our Economy in it.

As the Euro slided, our pound outside of it, would have rose in value,making us even more uncompetitive, considering our wage rates compared to Eastern Europe.
Inward investment would have slowed much quicker than it has been doing.

Not to mention, slower domestic demand due to higher interest rates.

Even the Fás report you Dáithi refer to, concedes that the Irish unemployment rate is only half that of the European average and to be realistic I think, shouldn't be something to whinge about.

Cambridge single out Glasgow, a city not much smaller than Dublin, as having had a poor performance.
Mary Harney had nothing to do with that, it's also in the sterling area.

Taking a specific Irish example:
Arklow co wicklow lost 200 jobs in traditional manufacturing( IFI ) in the last year, but the town has gained twice that number in medical related jobs, which is a growth area.
Unfortunately for those at 3com, a globaL downturn means some corporations when their profits take a hit, look for cheaper sources of labour and Ireland is way down on that list at the moment.
Theres absolutely nothing any government can do about that, bar passing a law halving Irish manufacturing wages, which wouldn't be possible unless we lived in some sort of military dictatorship.
The expectations of people in this country were always high and as such were always susceptible to the risk of being sidelined by the lower expectations of other countries East of here and in the " Third World " .
Thats life, not government policy

mm

dathi1 · 05-09-2003 2:43pm

Even the Fás report you Dáithi refer to, concedes that the Irish unemployment rate is only half that of the European average and to be realistic I think, shouldn't be something to whinge about.

That has been the case anyway for the last 8 years that's not my issue, I'm merely referring to that fact that the Euro might not be such a good idea after all since inflation and US dollar / export issues and the effect on employment here in the future etc.........and as for harney..I've no opinion as above.

dathi1 · 05-09-2003 2:50pm

This will especially be the case when Britain (hopefully) signs up.

Whatever chance Blair had of assuring the UK public that the Euro is good for Britain is now defunct after his Bush poodeling no one trusts him. Unless they can fly in the WMD before Christmas.

dathi1 · 05-09-2003 2:54pm

also check here an interesting article:
http://www.euobserver.com/index.phtml?aid=12551

Duffman · 05-09-2003 4:14pm

Friend in Sweden said majority were against it in recent opinion polls..

I'd say Denmark will be first as public opinion is more in favour of joining the euro... Referendum will be necessary as Denmark chose to opt out of various parts of the treaties including single currency bit..

DadaKopf · 05-09-2003 4:50pm

Danes don't wanna join 'cos they hate Germany. Swedes are doing too well and are too independent.

05-09-2003 6:18pm

Originally posted by dathi1
I'm merely referring to that fact that the Euro might not be such a good idea after all since inflation and US dollar / export issues and the effect on employment here in the future etc.........

Well you are worrying over nothing really, inflation is dropping now,not that 5% over all was a terror in itself.
Some of the inflation in the economy was recently created by the government as you know .
It also has a lot to do with the lack of a competition authority with teeth here so , some businesses can be greedy and get away with it.

Regarding the U.S dollar falling in value and export issues, those would have affected us , if we were outside the Euro as well, and probably by even more.
Imagine the complaints if our Finance minister had to put aside millions of Irish pounds in order to prop up or lower the value of the Irish pound.
To us being an S.O.E with limited resources, membership of the Euro has had more benefitial effects than downsides.

Getting politicians to Enhance the powers and resources of the competition authority, now thats another kettle of fish and something more worthy of complaint

mm

Cork · 05-09-2003 8:26pm

Originally posted by Man

Some of the inflation in the economy was recently created by the government as you know .

mm

Sure, recent increases in both the cost of the postage stamp and the VHI are examples of this.

There needs to be a value for money culture throughout our public services. We also need to beef up Revenue to cut out tax evasion.

The Euro was hijacked by many to round up prices. Competion thougout of country needs encouragement big time.

I think the benefits of the Euro are pretty small. Sweeden are better off out of it. The cost has been complete control of monetary policy.

Low interest rates have created a bubble in house prices making the prospect of house ownership very difficult.

Sweden and the euro

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