Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Why don't we leave the EU? Join the Swiss in EFTA
Options
Comments
-
Our national debt wasn't as high back then. Also, we were part of the EU, so there were no barriers to trade or immigration to encourage businesses from coming here.I'd say we'll be alright. We devalued our currency back in 1993 and we got through it. The increase in economic activity will make up for the higher costs of imported goods.
If everyone knows the currency is going to fall in value, they're going to take their money out of the system, correct? If everyone does this, they'll bankrupt the banks, forcing the government guarantee scheme to fork out more money to cover those who got there late to the party. To pay for this, the government would have to borrow more money, causing the national debt to rise further and further...this is my point.Why would it be a problem paying back our debt? Devaluing our currency would just mean that the real value of our debt would rise but that is going to happen anyway. The increased economic activity and wealth creation as a result of a devaluation will mean that we'll have a better chance of paying back the debt than if we continue in our depressed state and just wait for wages and unemployment to fall by themselves.
A currency has to be backed by something, whether that is something physical (e.g. oil/gold in the case of Norway/Switzerland), or "confidence" (e.g. the Euro). Who would buy the Irish currency?Why would it become worthless? It would decrease in value but what would lead to it becoming worthless?
I don't believe it is scaremongering -- I don't see any other outcome to us pulling the plug. What do we have that Zimbabwe doesn't have?Scare-mongering can't be easily dismissed as being untrue because it relates to something that hasn't happened yet.
You're assuming it's just filling out a few forms -- we'd be equivalent to the African nations who are trying to work in Europe and get deported after smuggling their way across borders. And if we weren't like that (because we have an 'open' work permits), then what exactly have you gained by pulling out of the EU?I think if a referendum was held I think the majority of people would say that immigration has been far too high over the last ten years and that we can't continue to operate an open door policy towards the eastern Europeans. If filling out a few forms when we want to work in another European country is the price we have to pay for regaining control of our borders then I think most Irish people would be willing to pay that price.
If you're in the EFTA, you have to abide by most of the rules set by the EU, you just don't get a say on them...sounds great :rolleyes:I don't think anyone in this country wants us to pull out of Europe. There are many of us who would just like to be part of a different kind of Europe to the one we're in. We'd like to be in Europe but not run by Europe.
Also, with the exception of Lichtenstein, all members of EFTA are part of the Schengen agreement. Ireland can't join that until the UK joins (and they won't join because they're stubborn). We'd be making things very awkward for any multinational who wanted to set up here (visa requirements etc.)
I disagree, but as neither of us has numbers to back this up, we're just in a guessing game.It wouldn't work if it was used on its own, but in combination with the devaluation of the currency and a decrease in the corporation tax rate, I think we'll be able to cover the costs.0 -
Personally I would be a lot more optimistic about our continued membership of the Euro if we were able to cut costs rapidly in response to economic problems. However that recent article by Gurdgiev, we're not doing too well there, and this is three years into a severe recession and likely several years to go and if we can't get the economy sorted then we'll have more banking difficulties as people are laid off and can't pay their mortgages. In fact a lot of the problems people associate with leaving the Euro we've already had due to being in the Euro.maggy_thatcher wrote: »If everyone knows the currency is going to fall in value, they're going to take their money out of the system, correct? If everyone does this, they'll bankrupt the banks, forcing the government guarantee scheme to fork out more money to cover those who got there late to the party. To pay for this, the government would have to borrow more money, causing the national debt to rise further and further...this is my point.0 -
I think you have to examine what you're saying here. If Ireland has nothing of value - we know there's few physical resorces, but what your saying is that we've also no human capital either, then whatever currency we use will make no difference, we're screwed.maggy_thatcher wrote: »A currency has to be backed by something, whether that is something physical (e.g. oil/gold in the case of Norway/Switzerland), or "confidence" (e.g. the Euro). Who would buy the Irish currency?0 -
SkepticOne wrote: »I think you have to examine what you're saying here. If Ireland has nothing of value - we know there's few physical resorces, but what your saying is that we've also no human capital either, then whatever currency we use will make no difference, we're screwed.
I accept we have human capital - but one of our biggest selling points on that is the fact that we currently have an open market to make the most of it - we encourage people to come and work here (multi-nationals frequently set their European bases here). Pulling out of the EU will hamper that as the ability for people all over Europe to come and work in an organization is significantly hampered. If we aren't in the EU and we aren't in Schengen, then we don't have a "unique selling point" to this country that couldn't be done easier inside one of the two groups.0 -
I think there's a flaw in your logic here. I'm not saying it would be great all around if we left the EU but leaving whatever international organisation doesn't mean we have to raise barriers to workers from other countries. We can be exactly as open as we need to be to suit our purposes. If we feel that multinationals are attracted to Ireland because of the ability to recruit from other parts of Europe then we can ensure they can continue to do that in much the same way that we maintain the low corporation tax.maggy_thatcher wrote: »I accept we have human capital - but one of our biggest selling points on that is the fact that we currently have an open market to make the most of it - we encourage people to come and work here (multi-nationals frequently set their European bases here). Pulling out of the EU will hamper that as the ability for people all over Europe to come and work in an organization is significantly hampered. If we aren't in the EU and we aren't in Schengen, then we don't have a "unique selling point" to this country that couldn't be done easier inside one of the two groups.
As regards the paying ourselves in Euro, whilst multinationals might like the convenience of the single currency, the extent to which that is the overriding concern may well be overstated by proponents of the currency.0 -
Advertisement
-
maggy_thatcher wrote: »
If you're in the EFTA, you have to abide by most of the rules set by the EU, you just don't get a say on them...sounds great :rolleyes:
Also, with the exception of Lichtenstein, all members of EFTA are part of the Schengen agreement. Ireland can't join that until the UK joins (and they won't join because they're stubborn). We'd be making things very awkward for any multinational who wanted to set up here (visa requirements etc.)
Not true. EEA obligations amount to a small fraction of EU rules, plus the is an emergency opt-out clause (which has never needed to be used). EEA members do get a say but not a vote via the EFTA/EU committees.
Lichenstein is effectively in schengen as it has no ports and is surrounded by schengen countries. The UK cant join as not all UK citizens are EU citizens, plus they have special arrangements with the commonwealth countries.
Multiple entry schengen visas cost only 100 quid which wont break any donkeys backs in business.0 -
The main reason that opponents of the EU are providing is that we have open borders for foreign workers...if we open our borders to allow these workers in (while at the same time not having the power to allow people who work here have permission to go and work in the rest of Europe), what have we gained by withdrawing ourselves from Europe?SkepticOne wrote: »I think there's a flaw in your logic here. I'm not saying it would be great all around if we left the EU but leaving whatever international organisation doesn't mean we have to raise barriers to workers from other countries. We can be exactly as open as we need to be to suit our purposes. If we feel that multinationals are attracted to Ireland because of the ability to recruit from other parts of Europe then we can ensure they can continue to do that in much the same way that we maintain the low corporation tax.
It's more the ability to pay for our national debt, that's currently in Euro that I'm more concerned with, rather than the ability for multinationals to pay in Euros (though it does make price-transparency easier)SkepticOne wrote: »As regards the paying ourselves in Euro, whilst multinationals might like the convenience of the single currency, the extent to which that is the overriding concern may well be overstated by proponents of the currency.0 -
SkepticOne wrote: »I think there's a flaw in your logic here. I'm not saying it would be great all around if we left the EU but leaving whatever international organisation doesn't mean we have to raise barriers to workers from other countries. We can be exactly as open as we need to be to suit our purposes. If we feel that multinationals are attracted to Ireland because of the ability to recruit from other parts of Europe then we can ensure they can continue to do that in much the same way that we maintain the low corporation tax.
As regards the paying ourselves in Euro, whilst multinationals might like the convenience of the single currency, the extent to which that is the overriding concern may well be overstated by proponents of the currency.
+10 -
A say but no vote is equivalent to no say -- they can just ignore you.BetterLisbon wrote: »EEA members do get a say but not a vote via the EFTA/EU committees.BetterLisbon wrote: »Lichenstein is effectively in schengen as it has no ports and is surrounded by schengen countries. The UK cant join as not all UK citizens are EU citizens, plus they have special arrangements with the commonwealth countries.
Multiple entry schengen visas cost only 100 quid which wont break any donkeys backs in business.
So we'd be the only country in neither Schengen nor the EU? How could you say that we were "in Europe" at all with an approach like that?
The cost of Schengen visas depends on where you are from and what you plan to do (if you want the ability to live there etc.). What's to stop the Schengen agreement countries imposing a €1,000 "abandon ship surcharge" to us?0 -
I think the point has already been made that being forced to use a currency that is overvalued from Ireland's point of view does not help paying back that debt either. In fact it also makes it worse.maggy_thatcher wrote: »It's more the ability to pay for our national debt, that's currently in Euro that I'm more concerned with, rather than the ability for multinationals to pay in Euros (though it does make price-transparency easier)
A rough analogy is that of a landlord with a certain debt charging a certain rent for his properties. If he finds that many of his rental units are going empty then the logical thing to do is lower that rent in order to fill the units.
He, however, will argue (incorrectly) that if he lowers his rent then, relative to his rents, his debt will go up and so will (again incorrectly) be reluctant to lower those rents.
Interestingly this is the way a lot of landlords in Ireland think at the moment. Psychologically it is very hard for them to make the necessary rational adjustment that would put them in a better position to pay their debts.
I think the same psychology is at work with many proponents of the Euro. If lowering the value of currency that we use to pay each other gives us a competitive boost then that puts us in a better, not worse, position to pay our debts. All we are talking about is correctly pricing our goods and services.0 -
Advertisement
-
maggy_thatcher wrote:Our national debt wasn't as high back then. Also, we were part of the EU, so there were no barriers to trade or immigration to encourage businesses from coming here.
But the problem you mentioned about the higher costs of imports would have applied back then as much as it would now. The devaluation in 1993 still provided a boost to our economy in spite of the higher import costs.maggy_thatcher wrote:If everyone knows the currency is going to fall in value, they're going to take their money out of the system, correct?
The trick is to do it quickly before depositors have a chance to react.maggy_thatcher wrote:If everyone does this
Everyone won't do it though. Even if we advertised it months in advance, Irish people with savings in Irish banks would be unlikely to withdraw their savings en mass.
Holding your savings in your national currency is no different from owning shares in the company you work for. You don't get rid of them at the first sign of trouble, you hang on them even if they take a dive because you know that it's their long-term value that counts and so you're prepared to hold on to them and give them a chance to regain their value.
As long as we can restore confidence in our economy and reassure people that the currency will regain value in the long-term there's no reason for people to want to ditch it.maggy_thatcher wrote:You're assuming it's just filling out a few forms
Yes, I'm assuming it will be like going to work in Australia or America.maggy_thatcher wrote:I disagree, but as neither of us has numbers to back this up, we're just in a guessing game.
No, we're not in a guessing game. We can state with a high degree of confidence that we will not need to cover the costs of EU-imposed tariffs on our exports but if we do find ourselves in a position where we have to pay those costs we will have the means to cover them.maggy_thatcher wrote:If we aren't in the EU and we aren't in Schengen, then we don't have a "unique selling point" to this country that couldn't be done easier inside one of the two groups.
How does being in the same position as almost 30 other countries provide us with a unique selling point? What is unique about a European country having access to the markets of other European countries?0 -
The devaluation that occurred then was to stop currency speculators who were persistently attacking the Punt, and our interest rates were sky-rocketing. We devalued as an alternative to raising interest rates further. It's a very different game to what we have now (where our interest rates are, to some peoples opinion, too low). Also, I think you're underestimating how much the currency would drop.But the problem you mentioned about the higher costs of imports would have applied back then as much as it would now. The devaluation in 1993 still provided a boost to our economy in spite of the higher import costs.
You can't do it quickly - it requires a referendum to pull out of the EU, meaning there's a mandatory notice period (also even after the referendum is passed, there's a necessary delay between when it passed and when it becomes law). As an example of somewhere that considered doing something like this before - take Quebec - it had a referendum about seceding from the rest of Canada...as soon as that happened a lot of major organizations with headquarters in Quebec (including the Bank of Montreal) transferred their head offices to Toronto. Quebec lost a fortune as a result. Although the referendum failed, it added a level of uncertainty that investors weren't happy about.The trick is to do it quickly before depositors have a chance to react.
I think you're underestimating how people get when it's their own money on the line. Granted not everybody will, but as soon as the run starts, people panic (see for example the Northern Rock bank runs in the UK - if that run hadn't started, the bank would probably have survived, but there was enough uncertainty around that a run started and the bank collapsed).Everyone won't do it though. Even if we advertised it months in advance, Irish people with savings in Irish banks would be unlikely to withdraw their savings en mass.
At the moment people have their savings in their national currency (the Euro). You're proposing that people convert their life savings from a stable reliable currency into a new currency (that becomes their "national" currency) in the hope that it bounces back (when one of the primary reasons for pulling out of the Euro is so that we can let the new currency devalue?).Holding your savings in your national currency is no different from owning shares in the company you work for. You don't get rid of them at the first sign of trouble, you hang on them even if they take a dive because you know that it's their long-term value that counts and so you're prepared to hold on to them and give them a chance to regain their value.
That's a big if.As long as we can restore confidence in our economy and reassure people that the currency will regain value in the long-term there's no reason for people to want to ditch it.
Going to work in Australia or America is more than just filling out forms - there's an approval process that decides whether or not you are entitled to the job (e.g. could an Australian or an American do the job that you're applying for).Yes, I'm assuming it will be like going to work in Australia or America.
We're the only English speaking Eurozone country. We have low corporation taxes. It's certainly better than being a small isolated country with significant barriers to entry.How does being in the same position as almost 30 other countries provide us with a unique selling point? What is unique about a European country having access to the markets of other European countries?0 -
If he is forced to lower his rents to below his mortgage repayments, then his debt will go up. Similarly if we drop our currency too low, so that we have trouble making interest payments, our debt goes up.SkepticOne wrote: »I think the point has already been made that being forced to use a currency that is overvalued from Ireland's point of view does not help paying back that debt either. In fact it also makes it worse.
A rough analogy is that of a landlord with a certain debt charging a certain rent for his properties. If he finds that many of his rental units are going empty then the logical thing to do is lower that rent in order to fill the units.
He, however, will argue (incorrectly) that if he lowers his rent then, relative to his rents, his debt will go up and so will (again incorrectly) be reluctant to lower those rents.
Interestingly this is the way a lot of landlords in Ireland think at the moment. Psychologically it is very hard for them to make the necessary rational adjustment that would put them in a better position to pay their debts.0 -
maggy_thatcher wrote: »A say but no vote is equivalent to no say -- they can just ignore you.
So we'd be the only country in neither Schengen nor the EU? How could you say that we were "in Europe" at all with an approach like that?
The cost of Schengen visas depends on where you are from and what you plan to do (if you want the ability to live there etc.). What's to stop the Schengen agreement countries imposing a €1,000 "abandon ship surcharge" to us?
That is the disadvantage of the EFTA. But bear in mind the national veto is an endangered species in the EU so we can be ignored as EU members too.
Well being in the EEA would count as "in europe" as would a bilateral treaty like the swiss ones imo.
Our EEA treaty rights guarantee us the right to live and work in all EEA states so fear not an "abandon ship surcharge".0 -
The only reasons people have provided (in this thread) for leaving the EU and joining EFTA are:BetterLisbon wrote: »That is the disadvantage of the EFTA. But bear in mind the national veto is an endangered species in the EU so we can be ignored as EU members too.
Well being in the EEA would count as "in europe" as would a bilateral treaty like the swiss ones imo.
Our EEA treaty rights guarantee us the right to live and work in all EEA states so fear not an "abandon ship surcharge".- Immigration control
- Currency Control
You've just eliminated immigration control (assuming we manage to stay being in the EEA), so we're down to currency control. Pulling out of the EU seems like a pretty drastic measure just because you want to devalue our local currency. We'd take the control that's currently managed by ECB and put it in the hands of the Irish Central Bank, and hope that they did a better job...meanwhile putting the rest of the economy at risk, other than a "trust us we'll do it right" statement.
Are there any other reasons why we'd join EFTA in favour of the EU?0 -
maggy_thatcher wrote: »The only reasons people have provided (in this thread) for leaving the EU and joining EFTA are:
- Immigration control
- Currency Control
Are there any other reasons why we'd join EFTA in favour of the EU?
Five Reasons why i would support EFTA is as follows:
1- Independent foreign policy. Since the Single European Act our independent foreign policy has been dying by a thousand cuts. Each successive treaty has brought us closer and closer to NATO policies and the foreign policy ambition of other EU nations.
2- Independent Justice policy. The continental model is more favourable towards the state than the citizen. The future status of our opt-out is critical.
3- National identity. It is being consumed by a european identity with citizenship, passports, flags, insignia etc.
4- Fisheries. In EFTA we get them back.
5- Agriculture. CAP is killing small and medium farms. Only rich farmers benefit from CAP these days.0 -
Debts owed by the government and by financial institutions based in Ireland totalled €1trillion at the end of February, according to new statistics from the Central Bank.
The figures cover money owed through bonds and other financial instruments issued by government and by financial institutions, including foreign lenders with operations here, such as those based at the IFSC.
Today's figures do not include person debt.
Read more: http://www.breakingnews.ie/business/irelands-debt-is-1trillion-central-bank-453859.html#ixzz0l6dWOT7w..........
This is official then, Greece is highly publicised but we are in a worse financial state than previously thought.
The EU will bail them out, but I doubt they'll do the same for us and the Spanish... I think we are living on borrowed time in the eurozone.
0 -
Hands up anyone who knows why "person" debt was not included?
Staggering figure, by the way.0 -
The trick is to do it quickly before depositors have a chance to react.
Everyone won't do it though. Even if we advertised it months in advance, Irish people with savings in Irish banks would be unlikely to withdraw their savings en mass.
Holding your savings in your national currency is no different from owning shares in the company you work for. You don't get rid of them at the first sign of trouble, you hang on them even if they take a dive because you know that it's their long-term value that counts and so you're prepared to hold on to them and give them a chance to regain their value.
Hello !! I have my savings in the bank in € Euro !
You are proposing to convert them to a new currency which will dive in value when introduced and you think that I should just sit back and wait to see what happens??? Are you for real?
There's no comparison with 1993 because back then we devalued our own currency. "Re-introducing the punt" means you want to create a new currency and convert existing euros at a rate of 1:1. Of course, the suitcase of euro notes under your local coke dealer's bed won't suffer any conversion.
I wrote a long post on this before but I can't believe you think abolishing the euro in Ireland would be such a simple, cost-free process.0 -
Hello !! I have my savings in the bank in € Euro !
You are proposing to convert them to a new currency which will dive in value when introduced and you think that I should just sit back and wait to see what happens??? Are you for real?
There's no comparison with 1993 because back then we devalued our own currency. "Re-introducing the punt" means you want to create a new currency and convert existing euros at a rate of 1:1. Of course, the suitcase of euro notes under your local coke dealer's bed won't suffer any conversion.
I wrote a long post on this before but I can't believe you think abolishing the euro in Ireland would be such a simple, cost-free process.
Leaving the Euro would involve a partial default and exchange controls. No-one seriously denies that.0 -
Advertisement
-
We do have our own foreign policy - each country can decide what policy to implement. The EU is not a country.BetterLisbon wrote: »Five Reasons why i would support EFTA is as follows:
1- Independent foreign policy. Since the Single European Act our independent foreign policy has been dying by a thousand cuts. Each successive treaty has brought us closer and closer to NATO policies and the foreign policy ambition of other EU nations.
And we will always have the opt-out until/unless a future treaty takes place removing it from us. Running away from the EU isn't going to change that.BetterLisbon wrote: »2- Independent Justice policy. The continental model is more favourable towards the state than the citizen. The future status of our opt-out is critical.
There's no such thing as European citizenship. European passports are just national passports with a standardized colour. The EU flag/insignia doesn't mean anything in particular. Even if there was these things, there's absolutely no reason why they can't be used in parallel anyway - look at America - a Texan is an American - they have their own flag, their own identity as someone from Texas, but they also have their identity as an American...nowhere does it say you can't have both.BetterLisbon wrote: »3- National identity. It is being consumed by a european identity with citizenship, passports, flags, insignia etc.
And lose all the grants that we have been rebuilding the country with. Also, the Atlantic is overfished at the moment, and we should really be out there less as it is...so we'd have a bigger piece of a smaller pie.BetterLisbon wrote: »4- Fisheries. In EFTA we get them back.
CAP helps larger farms more than it helps small farms (an issue that is being worked on in the current reforms)...how does it "kill" a small farm? And what would you replace it with? Remove the subsidies altogether and allow the small farm to go to the wall, or somehow fund (with what?) a different subsidy system to give small farms a benefit at the expense of larger farms (reducing efficiency, pushing food prices up)?BetterLisbon wrote: »5- Agriculture. CAP is killing small and medium farms. Only rich farmers benefit from CAP these days.0 -
So your solution then would be for the landlord to keep the rents high even though it leads to empty units and less revenue? How does that help him pay his debts?maggy_thatcher wrote: »If he is forced to lower his rents to below his mortgage repayments, then his debt will go up. Similarly if we drop our currency too low, so that we have trouble making interest payments, our debt goes up.
This is part of the point I was trying to make. The landlord's job is to maximise revenue from his units. That may mean lowering rents in order to fill the units. It also means that his debts relative to the rental price he is charging goes up, but that doesn't matter because his overall revenue had increased and is therefore in a better position to pay off his debts.
I think the mistake of the landlord is making in keeping asking rents high (but failing to realise that revenue not prices are important) is the same mistake people make in thinking that a strong Euro in Ireland helps us pay our debts.0 -
What makes you think your Euros are safe right now? If the economy is failing to adapt and become more competitive in the Euro then that is likely to mean further problems for the banks. We have already narrowly averted runs on the banks at huge expense to the tax payer and cost to the economy.Hello !! I have my savings in the bank in € Euro !
You are proposing to convert them to a new currency which will dive in value when introduced and you think that I should just sit back and wait to see what happens??? Are you for real?0 -
If the leases are up, then negotiate the prices...if they aren't, it's up to the person with the lease to come up with the money (or else default and prepare to be sued)...alternatively the landlord could sell their property or find ways to upsell (make their property more appealing at the higher rate).SkepticOne wrote: »So your solution then would be for the landlord to keep the rents high even though it leads to empty units and less revenue?
None of these are equivalent to us trying to pay a debt that remains in Euros with a weak currency.0 -
SkepticOne wrote: »What makes you think your Euros are safe right now? If the economy is failing to adapt and become more competitive in the Euro then that is likely to mean further problems for the banks. We have already narrowly averted runs on the banks at huge expense to the tax payer and cost to the economy.
We have a guarantee scheme in place that protects the Euros. As long as that's there the money is secure. Pulling out of the Euro will (almost) guarantee a run on the banks that nobody would be able to stop.0 -
SkepticOne wrote: »I think the mistake of the landlord is making in keeping asking rents high (but failing to realise that revenue not prices are important) is the same mistake people make in thinking that a strong Euro in Ireland helps us pay our debts.
I didn't say a strong Euro helps pay our debts, what I said was that a weak "new currency" will make it harder as unless our revenue increases substantially to cover it, we'll be at a loss.0 -
OK, so you renegotiate the rents down to whatever level will keep your tenants and for the empty units you set them at a level sufficiently low to attract tenant. Whatever you do you do not benefit from having rents higher than will attract and keep tenants.maggy_thatcher wrote: »If the leases are up, then negotiate the prices...if they aren't, it's up to the person with the lease to come up with the money (or else default and prepare to be sued)...alternatively the landlord could sell their property or find ways to upsell (make their property more appealing at the higher rate).
I think its interesting that there are many landlords out there who can't find tenants yet won't lower rents.
The analogy is not perfect but having an unfavourable exchange rate in the medium term makes it difficult for firms in Ireland to export to other countries. It makes it hard to reduce prices to the extent necessary to become competitive. Eventually costs will come down and competitiveness will increase but that takes time and as we have seen our competitiveness situation has not improved despite several years of economic difficulty by which time long term damage to the economy will have occurred.None of these are equivalent to us trying to pay a debt that remains in Euros with a weak currency.
We are not paying our debts from a big pile of Euros that are lying around that gets devalued if we leave the Euro; we are paying them out of money that we are earning from exports. We need to get that sorted as quickly as possible.0 -
But let us say a product a firm in Ireland is producing is selling in France for 10 euros. If our currency devalues, it is still selling in France for 10 euros. All that has changed is that the cost relative to Euros in Ireland has gone down in the medium term.maggy_thatcher wrote: »I didn't say a strong Euro helps pay our debts, what I said was that a weak "new currency" will make it harder as unless our revenue increases substantially to cover it, we'll be at a loss.0 -
The bubble itself might have been unavoidable but the size and the timing of the bubble were determined by factors that had a lot to do with our membership of the eurozone.
Look, do you accept tax breaks by Govt. was a major factor in the bubble. Other European countries did not have bubbles with the exact same interest rates.
We have 2 common denominators, the Euro and interest rates, yet only a couple of countries had property bubbles. Causation and correlation and all that. Even Spain, which had a bubble doesn't have the same problems with banks.
When you actually look at it like that, we are the exception. The rest, barring Greece, for different reasons, managed reasonably ok.sirromo wrote:The reason had a lot to do with demographics. Ireland's population is younger than most other other European countries.
To a point, yes. Investors crowded out the FTB's to a big degree, even though property wasn't an attractive investment. Classic bubble.sirromo wrote:Do you think they would have been more likely to act in Ireland's interests?
Considering they didn't act at all, that wouldn't be hard. What happened in Sweden in the 90's with EFTA, their own interest rates, currency etc.
What about Irish land prices in the late 70's? Own currency, rates and Central Bank?SkepticOne wrote: »Personally I would be a lot more optimistic about our continued membership of the Euro if we were able to cut costs rapidly in response to economic problems. However that recent article by Gurdgiev, we're not doing too well there, and this is three years into a severe recession and likely several years to go and if we can't get the economy sorted then we'll have more banking difficulties as people are laid off and can't pay their mortgages. In fact a lot of the problems people associate with leaving the Euro we've already had due to being in the Euro.
Maybe, but leaving it just doubles the existing problems.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
0 -
Advertisement
-
The state is not big enough to cover all the deposits and money owed to bond holders. In Greece, a Eurozone country, money is already leaving Greek banks due to the state of the economy there according to Paul Krugman in a recent article.maggy_thatcher wrote: »We have a guarantee scheme in place that protects the Euros. As long as that's there the money is secure. Pulling out of the Euro will (almost) guarantee a run on the banks that nobody would be able to stop.
When the guarantee was put in place in Ireland we were able to talk about ourselves having a relatively strong economy and have at least a few people believe it. That is not the case now.0
Advertisement