Why don't we leave the EU? Join the Swiss in EFTA

sirromo

Scofflaw wrote:

Whatever about the other countries, our time in the euro has certainly left us better off.

No, it hasn't. I would gladly exchange what we had in 2000 (subsequent growth included) for what we have now.

Scofflaw wrote:

I don't think you've established that the euro is "seriously hampering our economic recovery" compared to the situation if we had a free-floating national currency.

Anyone who doesn't believe that the euro is hampering our recovery should have no problem answering this question posed by the journalist David McWilliams:

David McWilliams wrote:

So the question I have for those who rightly suggest that we need to get our wages and prices down by 30 per cent to claw back the competitive losses we suffered since joining the euro is: how are we going to do it? In particular, how are we going to do this without leaving the euro?

What is the alternative to leaving the euro? How high does unemployment have to go for us to be competitive again?

If there is an alternative way to get costs down which doesn’t involve changing the currency, and that doesn’t involve massive unemployment and job losses in the trading part of our economy, I would love to hear it. Irish wages are not that flexible, despite the spin being put out.

Think about it. Irish wages, on aggregate, rose last year when the economy contracted by 9 per cent. If we can’t get wages down when we are in such dire straits, how are we going to grind down wages in the next few years?

ei.sdraob wrote:

This thread reminds me of the many PreLisbon threads here

many posters would go to great lengths with excellent posts to explain why something is good (or bad) idea

and the antagonist ignores them and continues on around the circle

Scofflaw wrote:

True - the Ian Bailey thread is another fine example.

Flamed Diving wrote:

Yup. Do you remember that McWilliams-leave the euro thread?

It's a bit ironic to see these following an excellent post by BetterLisbon which all of you have ignored.

Flamed Diving

I have yet to see an excellent post from the anti-euro side. If I do, I might engage it.

Scofflaw

SkepticOne wrote: »

Obviously low interest rates alone does not make someone buy a house but neither do these other factors (tax incentives etc.) "make" us do anything. All they do is provide incentives.

If you stand back and analyse what you are saying you will see that you are arbitrarily excluding low interest rates as a causal factor for no other reason than they they came in with the Euro. If we had not entered the Euro but had lowered interest rates to the same level anyway, you would have no problem attributing that action to our current problem along with the other actions that you mention, but but for no other reason that these low interest rates are due to the Euro it cannot be permitted to be even considered.

Is that a fair assessment of your position? If so, do you consider it to be entirely rational?

No, it isn't a fair assessment - it's another straw man. I haven't said that low interest rates or euro membership has had no effect on our economy, I've said that there's absolutely no sign that it was the major factor in our difficulties, and that the structural factors in the Irish economy that are giving us trouble now were (a) indigenous and (b) in train before euro membership.

The counter-factual of how our economy would have gone outside the euro is extremely difficult to make sensible comments on, but the kind of claims that have been made here can be seen to be insubstantial by reference to comparative statistics - which is presumably why Klaus and other such commentators don't use them.

Do try dealing with what I'm actually saying, please.

regards,
Scofflaw

SkepticOne

Scofflaw wrote: »

No, it isn't a fair assessment - it's another straw man. I haven't said that low interest rates or euro membership has had no effect on our economy

Back-pedalling here a bit. Earlier you said:

So, to be brief, the claim that the euro contributed to our current crisis is rubbish.

I think this betrays an irrational absolutist position. Are you sure you won't revert to it again?

Scofflaw

sirromo wrote: »

No, it hasn't. I would gladly exchange what we had in 2000 (subsequent growth included) for what we have now.

You mean you'd happily wind the clock back, which would give us another eight years before the structural problems in place in 2000 once again blew up in our faces. Yes, it doesn't surprise me that you think that.

sirromo wrote: »

Anyone who doesn't believe that the euro is hampering our recovery should have no problem answering this question posed by the journalist David McWilliams:

That's simple - don't dismiss the idea that average wages need to fall.

sirromo wrote: »

It's a bit ironic to see these following an excellent post by BetterLisbon which all of you have ignored.

That's because it isn't an excellent post - BetterLisbon has simply done what SkepticOne was sensible enough not to, and which I pointed up as a silly option in my post:

of course, you could claim that the faster growth before we joined was somehow rational and organic, while the growth after, though slower, was irrational and forced on us by the euro - but it's a value of 'could' that involves you looking pretty silly

BetterLisbon did exactly that.

cordially,
Scofflaw

Scofflaw

SkepticOne wrote: »

So, to be brief, the claim that the euro contributed to our current crisis is rubbish.

Back-pedalling here a bit. Earlier you said: I think this betrays an irrational absolutist position. Are you sure you won't revert to it again?

Once again you haven't read what I've said - you've confused yourself with your own straw men.

I haven't said that low interest rates or euro membership has had no effect on our economy

And I still haven't, and you still haven't presented evidence that shows the euro's role in our current difficulties. Until that time both my comments stand, although if you can demonstrate a convincing link I'll certainly consider it. In the meantime, though, you need to start reading what other people write, not what it would be convenient for you for them to have written.

cordially,
Scofflaw

SkepticOne

Scofflaw wrote: »

That's because it isn't an excellent post - BetterLisbon has simply done what SkepticOne was sensible enough not to, and which I pointed up as a silly option in my post:

BetterLisbon did exactly that.

I share the views outlined in BetterLisbon's post for the most part. Even if I disagreed with them I would not consider them silly but rather debatable. They only seem silly to you I believe because in your mind any factor related to the Euro is forbidden to enter into consideration. It is simply a way of tagging them with a label rather than dealing with them.

sirromo

Scofflaw wrote:

No, it isn't a fair assessment - it's another straw man. I haven't said that low interest rates or euro membership has had no effect on our economy, I've said that there's absolutely no sign that it was the major factor in our difficulties, and that the structural factors in the Irish economy that are giving us trouble now were (a) indigenous and (b) in train before euro membership.

Would it be far to assume that the Federal Reserve's policy of keeping interest rates low over the last decade played as minimal a role in fueling the US housing bubble as the ECB's policies did in fueling Ireland's housing bubble?

Most of what I've read on the subject of America's crash attributes much of the blame to Alan Greenspan for his role in keeping interest rates lower than they needed to be over the last decade. Would you say the people who blame the chairman of the federal reserve are probably wrong?

Scofflaw wrote:

You mean you'd happily wind the clock back, which would give us another eight years before the structural problems in place in 2000 once again blew up in our faces.

Yes, I would still rather be in the position we were in back in 2000 than be in the position we're in now.

The question is whether euro membership helped alleviate the structural problems that were in place in 2000 or whether it made them worse. I believe it made them worse because the flood of cheap credit helped fuel the boom and the surrender of our ability to set our own interest rates made it difficult for us to control inflation and thereby prevent wages rising at a rate that impacted on our competitiveness.

Scofflaw wrote:

That's simple - don't dismiss the idea that average wages need to fall.

I have a hard time understanding what you mean by that. Are you saying that we all just need to collectively accept the idea that wages need to fall and that this will somehow lead to us all agreeing to a 20% reduction in our wages? I can't see any problems getting the public sector unions to agree to this but I'm not sure if we have the means to implement this in the private sector.

BetterLisbon

BetterLisbon wrote: »

The strong euro has been instrumental in our loss of competitiveness especially in the UK market. David McWilliams has written in depth on this.

While the euro didnt force banks to overreach themselves it did provide them with access to cheap credit on the interbank market free of currency risk whereas previously banks had to be very careful in borrowing on the interbank market.

Overreliance on Construction was a self inflicted wound but it was helped by cheap mortgage credit making investment properties possible for the average punter on a decent wage.

It is true house prices were already rising faster but they were coming from a much lower level and interest rates were coming down with the preperations for the euro when they actually needed to go up to cool the market.

The bloating of the public sector would have devalued a floating punt or jeopardised a currency peg. With hard currency in the trough for sectional intererests to feed on this wasnt a problem.

Weak regulation was a self inflicted wound but again the euro magnified the problem for above reasons.

In short while the euro didnt force things to go wrong it did grease the path. Most of the aforemenioned problems would probably still have happened but with much reduced impact.

Even shorter: Fear of a speculative attack on the punt would have forced us to behave responsibly.

Still no takers???

Flamed Diving

BetterLisbon wrote: »

Still no takers???

Ok...

The strong euro has been instrumental in our loss of competitiveness especially in the UK market. David McWilliams has written in depth on this.

One question. Where do the majority of our exports go? I don't want a guesstimate, and I don't want a news article.

www.cso.ie

There you go, figure it out.

While the euro didnt force banks to overreach themselves it did provide them with access to cheap credit on the interbank market free of currency risk whereas previously banks had to be very careful in borrowing on the interbank market.

No, the Euro didn't force the banks to crazy. It was not the Euro's fault. Well done. I could sit here for 15 mins, writing out a thoughtful explanation as to why things went so wrong, providing links to papers, etc. But judging by poor Scofflaw's experience for the last few pages, what would be the punt?

Overreliance on Construction was a self inflicted wound but it was helped by cheap mortgage credit making investment properties possible for the average punter on a decent wage.

Yes it was, well done. Again, not the Euros fault. You are doing my job for me! Again, I could provide very good reasons why. But what would be the point?

It is true house prices were already rising faster but they were coming from a much lower level and interest rates were coming down with the preperations for the euro when they actually needed to go up to cool the market.

Property tax. Just like Peter Bacon recommended in 2001? No?

Just blame the Euro... why not?

The bloating of the public sector would have devalued a floating punt or jeopardised a currency peg. With hard currency in the trough for sectional intererests to feed on this wasnt a problem.

This is the funny thing, even if we had our own currency, our CB interest rate would be just as low as the ECB anyway. Small. Open. Economy. And we neighbour a monetary giant, no hope of monetary discretion. Again, I could explain and provide papers. But there is no point. Not until you stop strawmanning and misinterpreting, and all the other techniques used by anti-lisbon/euro posters.

Weak regulation was a self inflicted wound but again the euro magnified the problem for above reasons.

Not the Euro's fault, yet again. You are doing my job!

In short while the euro didnt force things to go wrong it did grease the path. Most of the aforemenioned problems would probably still have happened but with much reduced impact.

A path we could have avoided, with political will.

Fear of a speculative attack on the punt would have forced us to behave responsibly.

No, when that happens to a small country, you're pretty much screwed.

BetterLisbon

Flamed Diving wrote: »

Ok...



One question. Where do the majority of our exports go? I don't want a guesstimate, and I don't want a news article.

www.cso.ie

There you go, figure it out.



No, the Euro didn't force the banks to crazy. It was not the Euro's fault. Well done. I could sit here for 15 mins, writing out a thoughtful explanation as to why things went so wrong, providing links to papers, etc. But judging by poor Scofflaw's experience for the last few pages, what would be the punt?



Yes it was, well done. Again, not the Euros fault. You are doing my job for me! Again, I could provide very good reasons why. But what would be the point?



Property tax. Just like Peter Bacon recommended in 2001? No?

Just blame the Euro... why not?



This is the funny thing, even if we had our own currency, our CB interest rate would be just as low as the ECB anyway. Small. Open. Economy. And we neighbour a monetary giant, no hope of monetary discretion. Again, I could explain and provide papers. But there is no point. Not until you stop strawmanning and misinterpreting, and all the other techniques used by anti-lisbon/euro posters.



Not the Euro's fault, yet again. You are doing my job!



A path we could have avoided, with political will.



No, when that happens to a small country, you're pretty much screwed.

The UK market remains a very important one. We have a major currency exchange problem there fact.
I am not blaming the euro for our own mistakes i am pointing out that it gave us an inappropriate monetary policy and thus had the effect of compounding our mistakes. If we had kept the punt this compounding effect would not have happened imo.

Scofflaw

SkepticOne wrote: »

I share the views outlined in BetterLisbon's post for the most part. Even if I disagreed with them I would not consider them silly but rather debatable. They only seem silly to you I believe because in your mind any factor related to the Euro is forbidden to enter into consideration. It is simply a way of tagging them with a label rather than dealing with them.

I don't have any vested interest in any other euros than the ones I own - I think, rather, that you're not able to prove something you believe (that the euro is principal cause of our misfortunes).

You (and sirromo, and BetterLisbon) have a problem here - house price growth was greater before we joined the euro than after, but you want to be able to blame the euro (and low ECB interest rates) for unsustainable house price growth.

The only way, therefore, that you can suggest that house price growth was the result of the low interest rates associated with the euro is to point out that we were already in the euro Exchange Rate Mechanism.

That, though, gives you another problem, since that means that all our growth - both the "good" growth (1993 to 2000-2001) and the "bad" growth (2001/2 on) - took place within the context of the euro in its broader sense, which obviously isn't what you want to say.

Nor do the dates of "good growth" and "bad growth" coincide with the euro, really, because we locked into the euro fully in 1998, well before the physical introduction.

So I think you have to face the fact that our economic disaster was very much a home-grown affair.

cordially,
Scofflaw

BetterLisbon

Scofflaw wrote: »

That, though, gives you another problem, since that means that all our growth - both the "good" growth (1993 to 2000-2001) and the "bad" growth (2001/2 on) - took place within the context of the euro in its broader sense, which obviously isn't what you want to say.

Nor do the dates of "good growth" and "bad growth" coincide with the euro, really, because we locked into the euro fully in 1998, well before the physical introduction.

So I think you have to face the fact that our economic disaster was very much a home-grown affair.

cordially,
Scofflaw

Again we see correlation offered as proof of the benefits of the EU when something good happens during our EU membership. So why is it that when the shoe is put on the other foot you protest about the failure to show causation.
Again the euro didnt force us to make mistakes but it greased the path of those mistakes due to a totally inappropriate monetary policy and the removal of the fear of speculative attack.

bonkey

BetterLisbon wrote: »

Again we see correlation offered as proof of the benefits of the EU when something good happens during our EU membership. So why is it that when the shoe is put on the other foot you protest about the failure to show causation.

Actually, I was the one who made that point.

Scoffaw, pointed out that if correlation is your standard, then you have a problem because there are correlations with the euro which don't suit your argument and which you're not accepting.

In other words, he's pointing out that not only are you equating correlation with causation, but that you're doing so selectively.

If you stop being selective and allow for all correlations, your argument has new holes. If you allow for none, your argument has new holes.

Again the euro didnt force us to make mistakes but it greased the path of those mistakes due to a totally inappropriate monetary policy and the removal of the fear of speculative attack.

So then you would have to agree that in the absence of the euro, we would, in all probability have also made mistakes. Can you show that those mistakes would have left us better off? Naturally, you can't....because we've no idea what the situation would have been, nor what the mistakes would have been.

This leaves us with a situation where we managed to make mistakes to screw up our economy within the euro framework....and we have no idea how good, bad or indifferent our economy would have been had we made different (unknowable) mistakes in a different (unknowable) economic framework.

Which ultimately suggests that the conclusion should be that the euro is by no means perfect, but we've failed to establish a better alternative...and reached consensus that we made the mistakes that sank our economy

BetterLisbon

bonkey wrote: »

Actually, I was the one who made that point.

Scoffaw, pointed out that if correlation is your standard, then you have a problem because there are correlations with the euro which don't suit your argument and which you're not accepting.

In other words, he's pointing out that not only are you equating correlation with causation, but that you're doing so selectively.

If you stop being selective and allow for all correlations, your argument has new holes. If you allow for none, your argument has new holes.



So then you would have to agree that in the absence of the euro, we would, in all probability have also made mistakes. Can you show that those mistakes would have left us better off? Naturally, you can't....because we've no idea what the situation would have been, nor what the mistakes would have been.

This leaves us with a situation where we managed to make mistakes to screw up our economy within the euro framework....and we have no idea how good, bad or indifferent our economy would have been had we made different (unknowable) mistakes in a different (unknowable) economic framework.

Which ultimately suggests that the conclusion should be that the euro is by no means perfect, but we've failed to establish a better alternative...and reached consensus that we made the mistakes that sank our economy

Firstly bonk thanks for the info on the swiss bilateral treaties. It has proved very informative.
Now to address your point. I agree correlation does not prove causation it only gives rise to posing questions and in my last post i did offer an opinion on what would have turned out differently. So here goes again.

If we still had the punt it would (probably) be pegged to sterling at approx 90p. This would make life a hell of a lot better for those who export to the UK without making imports too expensive.

If we still had the punt the ICB would at least have had the option of raising interests rates in the mid-90's to get the emerging property bubble under control. Our committment to joining the euro on time meant we were forced to reduce interest rates.

If we still had the punt we would have had the option of tactical devaluations like the 1993 one. Our committment to the euro ruled that out.

The bribing of sectional interests would have devalued the punt or jeopardised any currency peg. The euro removed that obstacle.

The mismanagement of the economy would have been punished and punished early in the foreign exchange market. This would have forced us to behave and behave early.

ECB Interest rates were and are simply inappropriate and handicap proper economic management. The ICB could have set appropriate rates.

In short the protections the euro gave us against speculative attack actually facilitated economic misamangement and the ECB interest rates have not suited us at all.

Flamed Diving

BetterLisbon wrote: »

Firstly bonk thanks for the info on the swiss bilateral treaties. It has proved very informative.
Now to address your point. I agree correlation does not prove causation it only gives rise to posing questions and in my last post i did offer an opinion on what would have turned out differently. So here goes again.

If we still had the punt it would (probably) be pegged to sterling at approx 90p. This would make life a hell of a lot better for those who export to the UK without making imports too expensive.

If we still had the punt the ICB would at least have had the option of raising interests rates in the mid-90's to get the emerging property bubble under control. Our committment to joining the euro on time meant we were forced to reduce interest rates.

If we still had the punt we would have had the option of tactical devaluations like the 1993 one. Our committment to the euro ruled that out.

The bribing of sectional interests would have devalued the punt or jeopardised any currency peg. The euro removed that obstacle.

The mismanagement of the economy would have been punished and punished early in the foreign exchange market. This would have forced us to behave and behave early.

ECB Interest rates were and are simply inappropriate and handicap proper economic management. The ICB could have set appropriate rates.

In short the protections the euro gave us against speculative attack actually facilitated economic misamangement and the ECB interest rates have not suited us at all.

With respect, you don't understand how this works. Read this paper, its not technical, and the author is the current CB governor:

http://homepage.eircom.net/~phonohan/BNL.pdf


Pay close attention to:

'The 1955 interest rate blunder'

BetterLisbon

Flamed Diving wrote: »

With respect, you don't understand how this works. Read this paper, its not technical, and the author is the current CB governor:

http://homepage.eircom.net/~phonohan/BNL.pdf


Pay close attention to:

'The 1955 interest rate blunder'

Not the point i was making. I am talking about a floating currency or a currency peg not a currency board.
The 1955 blunder shows we made mistakes, but i never disputed that fact.

Flamed Diving

BetterLisbon wrote: »

Not the point i was making. I am talking about a floating currency or a currency peg not a currency board.
The 1955 blunder shows we made mistakes, but i never disputed that fact.

The only thing that is floating seems to be your point. If you had bothered to read the paper properly, you would have noticed what I am getting at.

Just forget it.

Lockstep

DaBrow wrote: »

The EU Parliament doesn't even allow proper debate or criticism to be spoken in its walls, look at Nigel Farage when he was punished for accurately and honestly challenging the crazy position of having a figure head lead the EU... Who isn't known outside his own country and has enormous power in his grasp.

The main reason Von Rumpey was chosen was that he is low key, a consenus builder and coming from Belgium, experienced in getting different groups to work together?

The position could have gone to someone like Blair but this would fundamentally alter what the position involves; it would turn the presidency into a high profile position like a traditional presidency, unlike the chairman position it occupies now.

Farage's comments were obnoxious, xenophobic, crude, woefully transparent electioneering and certainly not the kind of actions you'd expect from a parliamentarian.

bonkey

BetterLisbon wrote: »

Firstly bonk thanks for the info on the swiss bilateral treaties. It has proved very informative.

More then welcome.

If we still had the punt it would (probably) be pegged to sterling at approx 90p. This would make life a hell of a lot better for those who export to the UK without making imports too expensive.

So having argued that our policy would be better off with an independent currency, you now say you believe it would simply have been tied to something else.

With respect, that smacks of Monday morning quarterbacking. Knowing, as we do today, that Sterling and the euro are where they are, its easy to argue that being tied to (and being cheaper then) the cheaper of the two is the preferable situation.

If the euro tanks in the next quarter or so, and sterling gains....what then? Your model would have us in a worse position....even assuming we ignore all the side issues that your argument ignores (like the impact on euro-based imports/exports from being not in the euro.

If we still had the punt the ICB would at least have had the option of raising interests rates in the mid-90's to get the emerging property bubble under control.

You've already agreed - and do so again elsewhere in this post - that it ws financial mismanagement that was the root cause...and have argued that the euro facilitated that. In effect, what you have accepted is that given the situation they were in, the government mismanaged the economy spectacularly. I fail to see how defining a theoretical alternate situation would prevent mismanagement.

You give examples of what options we might have had, were we not tied to the euro. This doesn't address the reality that being tied to the euro, out government didn't take any of the options they did have. Why would different options give an expectation for a change in outcome?

The mismanagement of the economy would have been punished and punished early in the foreign exchange market. This would have forced us to behave and behave early.

We have been, and continue to be punished for the mismanagement of the economy. I fail to understand how you believe the same players would somehow have learned a lesson in milder difficulties that they patently haven't learned from the current troubles.

ECB Interest rates were and are simply inappropriate and handicap proper economic management. The ICB could have set appropriate rates.

Proper rates like...what?

I would point out that, as with the whole currency argument, Switzerland seem to defy your logic. They had rates lower then the ECB. Since the recession, they cut them to almost-nothing, just like the ECB. Throughout, they had a strong currency (as we've already discussed). Yet....the Swiss recession was perhaps the mildest in the developed world, and the recovery amongst the fastest.

From the Swiss example, it should be clear a strong currency and low interest rates are not automatically a hindrance and can, in fact, be a boon if managed correctly. Mismanagement is, of course, possible...but that's true regardless of what situation one is in.

In short the protections the euro gave us against speculative attack actually facilitated economic misamangement

Pegging to Sterling would have given us the same protections.

and the ECB interest rates have not suited us at all.

We mismanaged our use of them...which is not quite the same thing.

BetterLisbon

kickoutthejams wrote: »

The main reason Von Rumpey was chosen was that he is low key, a consenus builder and coming from Belgium, experienced in getting different groups to work together?

The position could have gone to someone like Blair but this would fundamentally alter what the position involves; it would turn the presidency into a high profile position like a traditional presidency, unlike the chairman position it occupies now.

Farage's comments were obnoxious, xenophobic, crude, woefully transparent electioneering and certainly not the kind of actions you'd expect from a parliamentarian.

Farage's comments were not xenophobic, thats outrageous unless its the "eurosceptic = xenophobic" kneejerk i have come to expect on discussion boards like this. They were most certainly obnoxious, crude, woefully transparent electioneering and unparliamentary, Farage should have apologised for them.
We wont really see the position of PCoTEC fully flesh out until a big personality gets it. Then of course we will be told we voted for it in full knowledge back in 2009.

BetterLisbon

bonkey wrote: »

More then welcome.


So having argued that our policy would be better off with an independent currency, you now say you believe it would simply have been tied to something else.

With respect, that smacks of Monday morning quarterbacking. Knowing, as we do today, that Sterling and the euro are where they are, its easy to argue that being tied to (and being cheaper then) the cheaper of the two is the preferable situation.

If the euro tanks in the next quarter or so, and sterling gains....what then? Your model would have us in a worse position....even assuming we ignore all the side issues that your argument ignores (like the impact on euro-based imports/exports from being not in the euro.


You've already agreed - and do so again elsewhere in this post - that it ws financial mismanagement that was the root cause...and have argued that the euro facilitated that. In effect, what you have accepted is that given the situation they were in, the government mismanaged the economy spectacularly. I fail to see how defining a theoretical alternate situation would prevent mismanagement.

You give examples of what options we might have had, were we not tied to the euro. This doesn't address the reality that being tied to the euro, out government didn't take any of the options they did have. Why would different options give an expectation for a change in outcome?


We have been, and continue to be punished for the mismanagement of the economy. I fail to understand how you believe the same players would somehow have learned a lesson in milder difficulties that they patently haven't learned from the current troubles.


Proper rates like...what?

I would point out that, as with the whole currency argument, Switzerland seem to defy your logic. They had rates lower then the ECB. Since the recession, they cut them to almost-nothing, just like the ECB. Throughout, they had a strong currency (as we've already discussed). Yet....the Swiss recession was perhaps the mildest in the developed world, and the recovery amongst the fastest.

From the Swiss example, it should be clear a strong currency and low interest rates are not automatically a hindrance and can, in fact, be a boon if managed correctly. Mismanagement is, of course, possible...but that's true regardless of what situation one is in.


Pegging to Sterling would have given us the same protections.


We mismanaged our use of them...which is not quite the same thing.

No my argument is that the euro cut off key options that could have meant the bubble would not have been so big when it burst. Yes i am drawing on hindsight so i am guilty of monday morning quarterbacking but hindsight is 20/20 and we are debating whether joining the euro was a good idea.

My point is that to operate an independent currency policy (including the option of pegging to another currency) you better behave or you will be cut to pieces on the foreign exchange market. Take Sweden as an example: The Krona is a successful floating currency, it works because Sweden is financially prudent and responsible. If wasnt it would go the way of the Icelandic Kroner in quick time. I argue that if we didnt have the rest of the eurozone and the ECB as fallback we would have been whipped into line by the market a long time ago.

K-9

BetterLisbon wrote: »

No my argument is that the euro cut off key options that could have meant the bubble would not have been so big when it burst. Yes i am drawing on hindsight so i am guilty of monday morning quarterbacking but hindsight is 20/20 and we are debating whether joining the euro was a good idea.

My point is that to operate an independent currency policy (including the option of pegging to another currency) you better behave or you will be cut to pieces on the foreign exchange market. Take Sweden as an example: The Krona is a successful floating currency, it works because Sweden is financially prudent and responsible. If wasnt it would go the way of the Icelandic Kroner in quick time. I argue that if we didnt have the rest of the eurozone and the ECB as fallback we would have been whipped into line by the market a long time ago.

Looking at how we didn't use the tools available to us, I'd say Iceland would be the better example of how we would have ended up.

bonkey

BetterLisbon wrote: »

No my argument is that the euro cut off key options that could have meant the bubble would not have been so big when it burst.

You missed the word "some" there. The euro cut off some key options. There were others.

There were economists and others pointing them out almost-continuously as the economy inflated and inflated and inflated, but mostly people pointed and scoffed at these doom-sayers, and applauded the latest governmental moves to continue the bubble-inflation.

If the government had had other options...why would that have changed things?

You keep glossing over this point...and I can't understand why. What was different about these options that their mere existence would have given us a government (and public in general, if we're honest) who didn't encourage the bubble and who acted resonsibly?

and we are debating whether joining the euro was a good idea.

Looks at thread title. If that's what we're discussing, we seem to have gotten there by dint of goalpost-moving. Not only that, but we're not even discussing the impact of euro membership...rather, we're limiting ourselves to one particular impact of euro membership, and disagreeing on what the real impact membership has had in that regard.

My point is that to operate an independent currency policy (including the option of pegging to another currency) you better behave or you will be cut to pieces on the foreign exchange market.

We're in the midst of a massive financial catastrophe, agreeing that governmental mismanagement was a key factor....and still arguing that in a different situation, our government would have acted responsibly because if they didn't things might have gone bad.

Your point doesn't seem to take reality into account in this regard.

I argue that if we didnt have the rest of the eurozone and the ECB as fallback we would have been whipped into line by the market a long time ago.

As I've already pointed out, this assumes that our government would have either behaved responsibly....or learned their lesson from irresponsible behaviour. Again I ask how your different scenario brings that behaviour about, when the current financial crisis clearly hasn't.

At the heart of it, you seem to be suggesting that if we weren't tied to the euro, we'd have honest, responsible politicians, implementing honest, responsible policies. Everything else is window-dressing...because if we don't have those politicians and policies, it makes no difference. From where I think, thats nothing but wishful thinking.

Lockstep

BetterLisbon wrote: »

Farage's comments were not xenophobic, thats outrageous unless its the "eurosceptic = xenophobic" kneejerk i have come to expect on discussion boards like this. They were most certainly obnoxious, crude, woefully transparent electioneering and unparliamentary, Farage should have apologised for them.
We wont really see the position of PCoTEC fully flesh out until a big personality gets it. Then of course we will be told we voted for it in full knowledge back in 2009.

Referring to Belgium as a non-country would certainly strike me as xenophobic.

BetterLisbon

kickoutthejams wrote: »

Referring to Belgium as a non-country would certainly strike me as xenophobic.

Then you have a very loose defiition of xenophobic.
A phobia is an irrational fear of hatred of something. I cant see how Farages childish comments could be seen to in that way unless the observer is conditioned into the eurosceptic=xenophobic kneejerk.

BetterLisbon

bonkey wrote: »

At the heart of it, you seem to be suggesting that if we weren't tied to the euro, we'd have honest, responsible politicians, implementing honest, responsible policies. Everything else is window-dressing...because if we don't have those politicians and policies, it makes no difference. From where I think, thats nothing but wishful thinking.

No what i am saying is that the scope for hookery and crookery was greatly increased by the euro and that key decisions such as raising interest rates in the mid-90s to nip the property bubble at source were made impossible by the euro.
Perhaps we would have ended up in the same mess but what i am saying is that things could well have ended up a hell of a lot better.

bonkey

BetterLisbon wrote: »

Perhaps we would have ended up in the same mess but what i am saying is that things could well have ended up a hell of a lot better.

Things could also have ended up a hell of a lot better even as members of the eurozone....which is why, ultimately, the argument presented is no reason to say that with hindsight we would have been better off.

We might have been better off. We might have been worse off. The ultimate determining factor(s), however, would not have been the actual membership of the euro.

At best, we could conclude that non-membership might have had a knock-on-effect which might have left us better off....but the same can be said of any number of decisions that send us down the wrong path.

Scofflaw

BetterLisbon wrote: »

No what i am saying is that the scope for hookery and crookery was greatly increased by the euro and that key decisions such as raising interest rates in the mid-90s to nip the property bubble at source were made impossible by the euro.
Perhaps we would have ended up in the same mess but what i am saying is that things could well have ended up a hell of a lot better.

And it appears you're going to continue saying it without a shred of evidence, too. There were policy instruments (plenty of them) that could have been used to cool the property bubble - but nearly every available policy instrument was used to heat it up, get FTBs on the ladder, encourage development, etc etc. The claim that if we'd had control of interest rates we would magically have chosen a completely opposite course with those doesn't stand up to a moment's unprejudiced scrutiny.

regards,
Scofflaw

Lockstep

BetterLisbon wrote: »

Then you have a very loose defiition of xenophobic.
A phobia is an irrational fear of hatred of something. I cant see how Farages childish comments could be seen to in that way unless the observer is conditioned into the eurosceptic=xenophobic kneejerk.

Xenophobia is a distrust or hatred of strangers or those who are different, and can apply to those who have the view to those of a different culture/nationality.
If you wish to split hairs over terminology grand, his comments attacking another country for being a non-country are jingoistic then.