Were we right to join the Euro?

BUMP!

Heated debate eh?????

How about this ye'r both half right!!!! I'd tell ye why but I'm going home.....:D

Wacker

Having small coins is a great thing. Really it is. The smaller, the better. Know why, anyone? Because it isn't free to mine all that metal used in virtually worthless coins! So use less of it. D'uh.

BUMP!

????Where did that come out of????

If you dont like coins - get a credit card! Whatever the reason - it still looks like monopoly money!! ... worth about as much too!!

The Corinthian

Originally posted by BUMP!
Whatever the reason - it still looks like monopoly money!! ...

I remember the same thing being said when we changed all the Punt to smaller banknotes in the mid 90's.

worth about as much too!!

Another well thought out argument... :rolleyes:

The Beer Baron

my head -> brick wall.

It's bad enough you consider yourself pragmatic in the face of evident truth and essentially flaunt your appauling lack of reality. But then you come out with something like this:

It’s like a Klansman who hates blacks first and then goes to find a pseudoscientific justification to hate them.

That's a nice analogy corinthian, really, very pretty.
Obviously you know that would really, really piss me right off or you wouldn't have said it.

...Arrogant, belligerant, tactless and still finding the time to be self-rightious! How do you do it? You truly are a Renaissance man!

I'd understand if you just came back with more of the above, that's what I was expecting- but since you're trying to draw me out and make me mad I must concede. This is because I know I'm on thin ice in this forum and any further conversation with you would inevitibly involve me loosing the plot- in this instance my sig says it all.

So although I don't wish the further inflation of your own ego on anyone else
I'll bow out rather than risk rage-induced bannination. This I do not because I can't address what you've said, but because I can't begin to resume this little debate without feeling sick to my stomach.

none the less enjoy your little victory ****, all I got is the poor consolation of doing the following.

/ignored.

The Corinthian

Someone's decided he's rather flip over the draughts board and storm off, I see...

SkepticOne

Capt'n Midnight wrote:

Don't forget the rise in lending especially to home buyers . This accounts for most of the lending to individuals. In a lot of cases the banks did not folllow their own rules with the fixed multipliers of first and second wages. If the banks were made to do this then you could regulate the amount of money in the economy by changing the credit rules. not just the multipliers eg: you could change the rules on repossesion of a family home (where stringent rules exist to prevent people welching) this would reduce the flow of money (to very rich people via) home buyers.

Although this should be done, it would be politically unpopular, imho. When the rules are first introduced (before house prices have fallen) FTB's would complain that they could no longer borrow enough to purchase houses and it's the Government's fault. When house prices do fall, established home owners would then complain. No one likes to see a drop in their own asset values.

The problem is that once monetary measures are moved to the EU level, local fiscal measures are down to whatever Government is in charge. The temptation would then be to loosen up policy prior to an election and tighen afterwards, thus leading to a boom and bust situation.

Whatever the problems of a local independent central bank, boom and bust tends to be less than when the politicians are in charge.

Lennoxschips

The big Euro economies (France, Spain, Germany, Italy) were sluggish between 1999 and 2002, so the ECB decided to lower interest rates to make borrowing easier to try and stimulate the economy. They didn't take the smaller economies, like Ireland's, into account, because we are statistically insiginificant. Our Celtic Tiger economy didn't even get on their radar. So, our economy, which was already in danger of overheating, was flooded with cheap money from low interest rates, and things prices sky rocketed. A similar effect happened in The Netherlands and Belgium, who also had roaring economies when the Euro came in. They have now also seen record inflation. This one size fits all approach to interest rates has meant that smaller countries like Ireland, Holland and Belgium have been made to suffer.

arcadegame2004

Lennoxschips wrote:

The big Euro economies (France, Spain, Germany, Italy) were sluggish between 1999 and 2002, so the ECB decided to lower interest rates to make borrowing easier to try and stimulate the economy. They didn't take the smaller economies, like Ireland's, into account, because we are statistically insiginificant. Our Celtic Tiger economy didn't even get on their radar. So, our economy, which was already in danger of overheating, was flooded with cheap money from low interest rates, and things prices sky rocketed. A similar effect happened in The Netherlands and Belgium, who also had roaring economies when the Euro came in. They have now also seen record inflation. This one size fits all approach to interest rates has meant that smaller countries like Ireland, Holland and Belgium have been made to suffer.

Statistical evidence is that inflation in Ireland peaked around late 2000-early 2001 at 5%-7%. Since then it has fallen drastically to 2.4%. So inflation has actually come down substantially since the introduction of the notes and coins. In an economy that was growing at 11% per year it was only a matter of time before inflation was going to kick in in a big way. The fact that 1 Irish Pound equals 1.27 Euro automatically made it look like prices had risen dramatically overnight. Lack of competition in the Irish economy is a bigger culprit for rip-offs in this country (e.g. Electricity market, gas market, public-transport, insurance-market) than the Euro in my opinion. I concede that when the Euro was weak, that the increased costs this placed on imports from the US and the UK contributed to inflation, but the way of avoiding that of course would be for Irish companies to import more from the Eurozone instead of the US and UK. Now that the Euro is strong, imports are cheaper and this has been a contributory factor to the lower inflation-rate.

That said, I accept that in SOME parts of the economy there are rip-offs taking place.

Lennoxschips

. In an economy that was growing at 11% per year it was only a matter of time before inflation was going to kick in in a big way.

Yes, but this is usually countered by raising interest rates to combat inflation. We didn't have the power to do this. As it was we had interest rates set at German and French levels, levels for economies that needed a boost, when our economy was in danger overheating. This was a recipe for disaster.

That inflation rates are now normal is because our economy has come down to French and German growth levels. But the damage has been done, we are the most expensive country in the Euro zone. And the next time our economy takes off we won't be able to control it because we'll have no power over our own interest rates.

So inflation has actually come down substantially since the introduction of the notes and coins.

Notes and coins have nothing to do with anything. We have been a part of the Euro and, crucially, have had our interest rate set by the ECB in Frankfurt since January 1999.

The Corinthian

Lennoxschips wrote:

And the next time our economy takes off we won't be able to control it because we'll have no power over our own interest rates.

Monetary policy is not the only way to encourage inflation. Arguably it’s not even the best way.

Notes and coins have nothing to do with anything. We have been a part of the Euro and, crucially, have had our interest rate set by the ECB in Frankfurt since January 1999.

A good point. Try getting people to understand that though.