Shane Ross: Reduce Corporation Tax to 9.9%

hmmm

CDfm wrote: »

Many felt that the euro was dangerous from the begining. This article explains it in simple terms. Its by Gilles Saint-Paul the French Economist.

Oh my goodness, an article by Gilles Saint-Paul. Well then.

Germany does quite nicely from the Euro mechanism - whereas it has failed Ireland,Greece, Spain & Portugal.

The bailout etc is essentially us supporting and subsidising the German economy for a system that has been a bloody nightmare for us.

We have behaved as if we have a moral responsibility that in fact we do not have.

I don't remember anyone forcing us to join the Euro? We can hardly ask to join a club and then blame the club members when we trip up on the rules.

We knew what would happen when we joined the Euro. This (the property bubble) was all under our own control. We did not have to allow 100% mortgages. We did not have to allow people borrow 6 times their income. We did not have to remortgage to buy property in stupid places. We did not have to base our government income on property activity taxes. We did not have to tell our children "rent is dead money, get on the ladder, only poor people rent, property is your pension".

CDfm

hmmm wrote: »

I don't remember anyone forcing us to join the Euro? We can hardly ask to join a club and then blame the club members when we trip up on the rules.

I don't remember anyone forcing us to sign up for Lisbon either.:pac:

We knew what would happen when we joined the Euro. This (the property bubble) was all under our own control. We did not have to allow 100% mortgages. We did not have to allow people borrow 6 times their income. We did not have to remortgage to buy property in stupid places. We did not have to base our government income on property activity taxes. We did not have to tell our children "rent is dead money, get on the ladder, only poor people rent, property is your pension"

People bought into that - but that is our own internal politics - pre euro their were controls in place via the market of the exchange rate mechanism. Post euro there was not.

What Gilles Saint-Paul says is this

What if they weren’t in the Eurozone?

Now what would have happened to such a country if it had not been a member of the Eurozone? Perhaps its central bank would have been worried about inflation and would have raised the interest rate. This would have cooled the economy down, and especially hit the oversized construction industry and perhaps even deflated the housing bubble. Or foreign investors would have taken into account the critical developments of the external accounts and attacked the currency. Its depreciation would have restored Spanish competitiveness and activity would have been reallocated from construction to exports. (The speculative attacks against the EMS in September 1992 illustrates just how quickly these corrective mechanisms may take place: The currencies that were attacked were only overvalued by some 5%.)
Eurozone membership not only destroyed those mechanisms, it exacerbated the imbalances.

What the Peterson Institute for International Economics says is this.

Germany is running the club for Germany like economic hooligans.

Op-ed

Having a Large Euro Area Is an Advantage for Germany

by Adam S. Posen, Peterson Institute for International Economics

Op-ed in Die Welt
February 19, 2010
English language version © Peterson Institute for International Economics.



Listening to the current hue and cry over Germany's role in backstopping Greek restructuring, one might be duped into thinking that having the euro extend beyond the core economies was a great mistake. Whatever the balance of economic costs and benefits of euro adoption for other countries, for Germany itself, widespread euro adoption has been a boon. There are many advantages to being the anchor economy for a currency zone from which Germany has benefited over the last 11 years. None of those advantages are imperiled by the Greek situation and all of those advantages increase with the size of the euro area.
First of these advantages to Germany is seigniorage: the public revenues generated when actual currency issued is used outside of the originating area. Throughout Eastern Europe and the Med, as well as in some forms of illicit commerce globally, cash euros are in wide usage—and that translates into hard cash for the German government budget, as much as 0.2 percent of GDP (or 5 billion euros) a year, every year. That usage abroad is much greater, and has more potential for growth in usage, than deutsche mark (DM) usage ever had.
Second, companies doing business in the euro area get to price and invoice most of their transactions in euros without having to worry about exchange rate fluctuations. That applies to both German companies exporting to other euro area members and foreign companies doing business in Germany. Greater certainty reduces transaction costs, lowering costs to the consumer. It also expands trade, creating more variety and competition, also of benefit to the economy's productivity growth. Germany, as the Euroexportmeister, benefits most from this network of stability—and again has a wider and deeper range of trade in its own currency now than it did under the DM. And that means more transactions with producers outside of the euro area are denominated in euros as well, reducing costs and risks there, too.

It is in the Germans' own enlightened self-interest to provide financing to ease the process of real adjustment in those euro area economies that have overstretched on spending on German goods.

Third, interest rates for businesses to borrow have been reduced on average. Some of this benefit was felt much more in other euro area economies than in Germany, since Germany already had the lowest risk premia on its borrowing. Still, the significant deepening of euro-denominated bond markets has paid off for many German businesses and households as well by expanding access to credit. That deepening of bond markets is a direct result of the euro's wide adoption including by Germany. This attracts inflows of capital to Europe beyond what came in to just the DM-denominated debt market, which increases liquidity. These gains dwarf any risk premia on overall euro debt that are feared, and may not even come to pass.
Fourth, at least still in prospect, the euro provides a platform for Germany to stand with the Americans, Chinese, Japanese, and now other rising economic powers in international negotiations. Yes, Germany was an original member of the G-5 then G-7, and had often spoken for continental Europe in the late 20th century. Increasingly, however, it will require the weight and legitimacy of the euro area as a whole to have a major voice at the table. In fact, that is an argument for the German political discussion to favor greater European integration in German self-interest. And that begins with how Greece and other "peripheral" economies—including in Eastern Europe outside the euro area—are treated.
Finally, and most importantly for the present situation, Germany benefits directly from the stability that the euro provides to surrounding countries—and that includes from having southern membership of the euro area. Germany gets to run a trade surplus with member countries that otherwise would not be able to afford so many of its exports. People should remember what happened in 1992 and 1995, the last time that other European economies found their combination of demand growth and real exchange rates against the German economy unsustainable: massive abrupt nominal depreciations against the DM, which hammered German export competitiveness and then shocked the depreciating economies. Those were lose-lose situations, and a repeat of such is what the euro prevents.
So the current fevered debate in Germany over a potential contribution to a strictly conditional loan to Greece—which will in any event be fully repaid—is misplaced. The German economy is a beneficiary of being able to run a sustained trade surplus with its European neighbors, particularly in a time of global contraction. It is in the Germans' own enlightened self-interest to provide financing to ease the process of real adjustment in those euro area economies that have overstretched on spending on German goods. That will not only keep the markets open and prevent contraction in growth on both sides of the trade——it will be an investment in the continued attractiveness of the euro area to future members. An expanded euro area remains so much in Germany's direct interest that it is worth financing, if not paying for.


http://www.iie.com/publications/opeds/oped.cfm?ResearchID=1497

So based on aggregate size we are in a club of unequals and do not pretend we are not .

We are being bullied.

K-9

As already pointed out, Iceland did have high interest rates and it didn't exactly work out great there.

CDfm

K-9 wrote: »

As already pointed out, Iceland did have high interest rates and it didn't exactly work out great there.

What is the population of Iceland -300,000 ????

Iceland was not in the Euro.

So a comparison to Iceland is not really appripriate -even though the problems were similar.

It may well be that traders lost the run of themselves with lax practices thruout europe.

I love this comment from Vanity Fair .

“You have to understand,” he told me, “Iceland is no longer a country. It is a hedge fund.”

Read More http://www.vanityfair.com/politics/features/2009/04/iceland200904?printable=true&currentPage=all#ixzz1GoFBK8T1


The short article is good because it discusses the real economy.

hmmm

CDfm wrote: »

What Gilles Saint-Paul says is this

What the Peterson Institute for International Economics says is this.

You can quote all these people I've never heard of all you want, but you still haven't addressed the fundamental point. No-one forced us to join the Euro and the implications were obvious as our interest rates fell to German levels.

So based on aggregate size we are in a club of unequals and do not pretend we are not .

We are being bullied.

Of course we're in a club of unequals, Germany and France have populations of 140 million people. But that doesn't equate to "bullying" because we signed up knowing the rules in advance - you can't blame Germany and France for our own regulatory incompetence in not controlling bank lending. Let me repeat it again - we asked to be part of this club.

sgb

Shane Ross is going to bore us to death:(

K-9

CDfm wrote: »

What is the population of Iceland -300,000 ????

Iceland was not in the Euro.

So a comparison to Iceland is not really appripriate -even though the problems were similar.

It may well be that traders lost the run of themselves with lax practices thruout europe.

I love this comment from Vanity Fair .

Read More http://www.vanityfair.com/politics/features/2009/04/iceland200904?printable=true&currentPage=all#ixzz1GoFBK8T1


The short article is good because it discusses the real economy.

I tend to think the way you dismissed that so easily means this is pointless, but however:

Iceland wasn't in the Euro, you have argued this was part of the problem, correct.

Iceland had very high interest rates, you argued our rates were too low, correct.

Iceland did have very high interest rates and funds from the Euro and other places flew there and deposited money, which their banks chose to stupidly spend on things like buying Premier League football clubs.

The common denominator wasn't a single currency or the ability to raise interest rates, it was lack of regulation and stupid decisions by banks while Governments stood by. This didn't happen, or well, not near the same extent, in certain Euro countries. Indeed, neither did it happen in some non Euro countries either.

So the Cause does not equal the Euro as countries with the Euro and without managed okay and countries with and without the Euro didn't.

Now, you could just ignore the above and make excuses or take account of the above and take stock.

CDfm

Some countries whose economies benefited had established capital bases.

Our indigenous capital base as with the Icelanders is/was primitive and I use this in the Marxist economic sense.

So they have economies where Euro convergence is a good thing.

I know all about lax regulation - but the markets pre-euro actually forced governments to act.

The other key difference between us and Iceland is size.

The euro did not produce convergence because it is fundamentally flawed. This was the effect we were told it would have.

It did produce a system whereby Germany got out of recession and the costs of reunification and engineered a trade surplus .

A politician will always go for growth and none of ours looked at the downside.

That is human behaviour if you look at Magregors Theory X & Theory Y

http://www.netmba.com/mgmt/ob/motivation/mcgregor/

It was predictable that politicians would not act.

The interest rate issue of low interest rates has not been applied to the bailout.

So you can say on the EU Macro Level -it works for Germany. In fact, convergence works for Germany.

The interest rates we are being charged are horrendus and include penalties.

The Euro is not an equal partnership. Germany is playing hardball.

Now I know we ****ed up big time - but ours was not the only **** up in the chain of events .

It was predictable to me and I was always anti the Euro and am still anti it.

Its operation is unfair and it will always be when one country can use it to dominate others. That country is Germany.

K-9

You were and are anti Euro, exactly.

CDfm

K-9 wrote: »

You were and are anti Euro, exactly.

If I were a German I would be pro-Euro.

My anti stance is based on that I cant see it having operated in Irelands interest.I am a realist.

So I am pro Ireland and I was not anti euro for any other reason as no one has managed to convince me that it is good and in Irelands interest to be pro-euro.

The economics did not stack for me.

Edit

I am also a big fan of transactional analysis effectivelly the forensic side of the economics that explains real trade relationships .

The german objection to the Corporation tax level we have is that it makes us a competitor.

The european "convergence" is not in our or Britains interest.

So lets get real as in the "real economy" whats in it for us.

CDfm

And Kenny is in Washington this week giving interviews and lobbying

Ireland’s Kenny Says Taxpayers Shouldn’t Bear All Bailout Cost

By Sandrine Rastello and Margaret Brennan - Mar 17, 2011 12:00 AM GMT Thu Mar 17 00:00:01 GMT 2011

Irish Prime Minister Enda Kenny. Photographer: Aidan Crawley/Bloomberg



Irish Prime Minister Enda Kenny said it’s “grossly unfair” that taxpayers alone should carry the cost of bailing out the country’s banks as he pushed for lower rates on a European-led rescue loan.
Kenny, on a visit to Washington where he says he’s trying to repair Ireland’s “damaged” reputation, called for changes to the rescue package by the European Union and the International Monetary Fund to avoid a situation where Ireland struggles to pay back its loan and can’t generate economic growth.
“It is grossly unfair to expect the taxpayer to have to pay 100 percent for the reckless lending practices of banks which caused this in the first instance,” Kenny said yesterday in an interview with Bloomberg Television’s “InBusiness With Margaret Brennan” that will be broadcast today. The 5.8 percent average rate Ireland pays for its loans is “too severe,” he said.
Kenny’s Fine Gael party took power last week after pledging to seek a European agreement on sharing the cost of rescuing the financial system with senior bank bondholders. His government is counting on ongoing stress tests to reveal the full extent of potential losses at the country’s lenders, after injecting 46.3 billion euros ($64.4 billion) into the financial system over the past two years.
Kenny stopped short of saying who should pay along with taxpayers. Asked about the treatment of senior bondholders, Kenny said that his government will put no additional cash into banks “until you see the scale of what the liability is, until there is an understanding of what might be here.”
Tax Incentive

He also vowed to keep the nation’s corporate tax rate “intact” to attract foreign investors, adding that his country is “open for business.”
Less than a week after failing to obtain a discount on the rate charged by the EU because of Ireland’s refusal to increase the country’s 12.5 percent company tax, Kenny repeated he is not willing to negotiate it.
“It’s not correct to equate a conditionality of a reduction in interest rates with the condition that a corporate tax is increased,” he said. “I am not prepared to compromise on something that is the individual competence of each country in respect of our corporate tax rates.”
French President Nicolas Sarkozy and Germany Chancellor Angela Merkel at a March 11 euro-area leaders summit refused to extend a cut in Greece’s borrowing costs to Ireland as Kenny pushed back on taxes.
Ireland has used its corporate tax rate, which compares with an EU average of about 23 percent and even higher rates in Germany and France, to lure companies such as Hewlett-Packard Co. and Pfizer Inc.
Ireland pays an average 5.8 percent interest rate on the 67.5 billion euros of aid from the IMF and the EU. Kenny said he expects to obtain “some flexibility” from Europe.

The trade surplus and access to the EU markets -the biggest consumer market outside the USA is a big issue in trade talks.

So it is a US strategic economic interest.

John Bruton did the same in the LSE .

This is fairly high profile stuff and is a bit of a move from the usual Paddy's Day Washington visit .

Love or hate the Americans- this is the national interest.

http://www.bloomberg.com/news/2011-03-17/ireland-s-kenny-says-taxpayers-shouldn-t-bear-all-bailout-cost.html

Monty Burnz

Joey the lips wrote: »

Man is a pleb and starting to loose all my respect. You maybe cannot see it but he makes Michael o leary look like a saint.

Just to help you understand if ireland has a referendum on the bail out it effects the value of the euro.

If this happen the dollar gains strength. This makes our imports of oil more expensive

Good man shane.

What do we import from the US? Sure, oil will go up a little. On the other hand, the price of European exports will go down.

Monty Burnz

hmmm wrote: »

You can quote all these people I've never heard of all you want, but you still haven't addressed the fundamental point. No-one forced us to join the Euro and the implications were obvious as our interest rates fell to German levels.

Of course we're in a club of unequals, Germany and France have populations of 140 million people. But that doesn't equate to "bullying" because we signed up knowing the rules in advance - you can't blame Germany and France for our own regulatory incompetence in not controlling bank lending. Let me repeat it again - we asked to be part of this club.

The problem is that it looks like the Irish government weren't allowed to let Anglo or any other bank fold - we were FORCED to bail them out - and the Fianna Failure morons who allowed the banks run wild just rolled over on that one too.

If the EU wanted no Eurozone bank collapses, that is fair enough. What is not fair is expecting 4 million out of 400 odd million to pay for it. They seem to have made us the little boy with his finger in the dam. Instead of thanking us and helping, they are walking away. We need to threaten to let the water flow to get them to share the load.

CDfm

Monty Burnz wrote: »

What do we import from the US? Sure, oil will go up a little. On the other hand, the price of European exports will go down.

Capital & jobs

We have no real wealth/ industry that can be converted into traded goods.

So the US invest with us -they get to trade with the EU.

The Germans by comparison do not want this as it interferes with their trade surplus with the surrounding countries.

The Euro eroded our sovereignty and no one dares ask have the Germans & French done this on purpose for economic dominance of the region.

The german view on the euro is that its german and it is there for their sole benefit.

In that sense, the price of oil is secondary if you cant create employment.

The Germans can hardly be tougher on us than they are being.

CDfm

hmmm wrote: »

You can quote all these people I've never heard of all you want, but you still haven't addressed the fundamental point.

Why do you not want to know how the French & German economists view the euro.

No-one forced us to join the Euro and the implications were obvious as our interest rates fell to German levels.

If you disagreed with Lisbon on the basis that it eroded our sovereignty.

Joining the Euro was a greater erosion of our sovereignty and I did not see any referendum.

Who knows what threats were used to politicians and what force was used.

Of course we're in a club of unequals, Germany and France have populations of 140 million people. But that doesn't equate to "bullying" because we signed up knowing the rules in advance - you can't blame Germany and France for our own regulatory incompetence in not controlling bank lending. Let me repeat it again - we asked to be part of this club.

Oligopolies get regulated to protect the weak.

The Germans and not the EU are making these decisions and whats more they have avoided controls

Their argument was simple. Europe was not an optimal monetary union because it lacked both labour mobility and the fiscal mutual insurance schemes that exist in the US. Also, nominal price formation was rigid so that we could not expect it to offset imbalances and competitiveness differences quickly.

K-9 wrote: »

I tend to think the way you dismissed that so easily means this is pointless, but however:

Iceland wasn't in the Euro, you have argued this was part of the problem, correct.

Iceland had very high interest rates, you argued our rates were too low, correct.

I havent argued that our rates were too low - I suggested that the euro mechanism had inherent flaws. The previous exchange rate mechanism was self regulating.

Iceland did have very high interest rates and funds from the Euro and other places flew there and deposited money, which their banks chose to stupidly spend on things like buying Premier League football clubs.

We are not Iceland and it is not an appropriate comparison.

The common denominator wasn't a single currency or the ability to raise interest rates, it was lack of regulation and stupid decisions by banks while Governments stood by. This didn't happen, or well, not near the same extent, in certain Euro countries. Indeed, neither did it happen in some non Euro countries either.

The CB was independent and the mechanisms for control were not regulated. Who benefited.

So the Cause does not equal the Euro as countries with the Euro and without managed okay and countries with and without the Euro didn't.

Now, you could just ignore the above and make excuses or take account of the above and take stock.

The only people Ireland matters to in Europe is the Irish.

The Germans only care about the Germans and any delusions we have about their altruistism we should be well disabused of by now.

hmmm

Monty Burnz wrote: »

The problem is that it looks like the Irish government weren't allowed to let Anglo or any other bank fold - we were FORCED to bail them out

No we weren't. We went begging the IMF and EU for money to keep our economy afloat and they offered it to us with conditions attached. At any stage we could have walked away if we felt there was a better alternative. It's not the fault of other people that we couldn't manage our own finances.

hmmm

CDfm wrote: »

Joining the Euro was a greater erosion of our sovereignty and I did not see any referendum.

Who knows what threats were used to politicians and what force was used.

That's just delusional, Ireland was happy to join the Euro. We could still have been happy to be in the Eurozone if only we had managed our economy properly. This was more than anything else a favour of regulation, and that regulation was entirely in our own hands.

Even today I don't see the regulator setting hard limits to loans being offered by banks. I don't see any bans on 100% mortgages. The same people are largely staffing the regulators office. We're pointing fingers at everyone else and we still haven't made meaningful attempts to prevent a recurrence.

Monty Burnz

hmmm wrote: »

No we weren't. We went begging the IMF and EU for money to keep our economy afloat and they offered it to us with conditions attached. At any stage we could have walked away if we felt there was a better alternative. It's not the fault of other people that we couldn't manage our own finances.

I have been told in private by a national pol cor that the EU were adamant that none of the Irish banks could be let go. If that is true, then what I have said is 100% correct. If the EU said 'let it go bust if you please' and the Fianna Failures still begged for the bailout money, then you are 100% correct.

jamesbrond

whiteonion wrote: »

Why is it that normal countries are able to have normal corporation tax rates without suffering from mass unemployment? The corp tax should be raised. The MMC:s are not going to leave the country because we jack up the corrp tax to 20% such a move would be very costly.

Oh oh. :rolleyes:
I know us Irish are all expert economists now, that one statement is why armchair economists are better kept in the armchair.

CDfm

hmmm wrote: »

No we weren't. We went begging the IMF and EU for money to keep our economy afloat and they offered it to us with conditions attached. At any stage we could have walked away if we felt there was a better alternative. It's not the fault of other people that we couldn't manage our own finances.

So they are lovely people to deal with.

The Germans get their bond holders protected by our taxpayer and tjhe Germans raise money and lend it to us at a penal rate of interest. Nice :rolleyes:

hmmm wrote: »

That's just delusional, Ireland was happy to join the Euro. We could still have been happy to be in the Eurozone if only we had managed our economy properly. This was more than anything else a favour of regulation, and that regulation was entirely in our own hands.

So how didn't we concede sovereignty by joining the euro.

You seem to have a real problem apportioning even part of the blame elsewhere other than Ireland.

The euro is a toxic currency .

You wont accept that it had structually faults that the mechanism did not correct. The previous mechanism did.

What rules were in place enforceing these rules.

None, because it is run by Germans for German benefit.

Even today I don't see the regulator setting hard limits to loans being offered by banks. I don't see any bans on 100% mortgages. The same people are largely staffing the regulators office. We're pointing fingers at everyone else and we still haven't made meaningful attempts to prevent a recurrence.

Ahm, there cant be a recurance because money is not being lent.

It is difficult to raise a 50% mortgage or any type of car loan.

Why argue about regulating something that no longer exists.

Monty Burnz wrote: »

I have been told in private by a national pol cor that the EU were adamant that none of the Irish banks could be let go. If that is true, then what I have said is 100% correct. If the EU said 'let it go bust if you please' and the Fianna Failures still begged for the bailout money, then you are 100% correct.

Something happened which caused the irish government of the day to act quickly.

Effectively, the country could have enacted Chapter 11 style legislation but bailout was the only thing on the table it seems

jamesbrond wrote: »

Oh oh. :rolleyes:
I know us Irish are all expert economists now, that one statement is why armchair economists are better kept in the armchair.

+ 1 the germans believe it is why they base here and not there.

View

CDfm wrote: »

Joining the Euro was a greater erosion of our sovereignty and I did not see any referendum.

The relevant referendum was the Maastricht Treaty one in June 1992. The No side made their arguments against the treaty (including the Euro) and were resoundingly defeated (69% Yes, 31% No).

I appreciate that you don't agree with that democratic decision of the electorate but it doesn't alter the overwhelming nature of the result.

CDfm

View wrote: »

The relevant referendum was the Maastricht Treaty one in June 1992. The No side made their arguments against the treaty (including the Euro) and were resoundingly defeated (69% Yes, 31% No).

I appreciate that you don't agree with that democratic decision of the electorate but it doesn't alter the overwhelming nature of the result.

Thanks

The European Economic Community began as a common market whose purpose was to eliminate trade barriers between member countries. As the institution matured over the decades, however, it began moving towards not just economic but also social, political, and monetary integration. This evolution is reflected in the name changes from European Economic Community, to European Community, and finally to European Union. In negotiating the Maastricht Treaty, EC members agreed to a number of key provisions. A common currency was to be established by the end of the 1990s, to be overseen by an Economic and Monetary Union (EMU). The EMU would be responsible for instituting the common currency and establishing a central bank which would supervise the EU's monetary policy. An important part of this plan is the exchange rate mechanism (ERM) which supervises and seeks to stabilize currency exchange rates between member countries.

Read more: Maastricht Treaty http://www.referenceforbusiness.com/encyclopedia/Kor-Man/Maastricht-Treaty.html#ixzz1GsXaYHgV

It still does not get away from the joining being optional & there was conciderable vagueness about its operation.

I would never have predicted that the germans would effectively control it.

It is only now that we can actually see how awful it is that the anti arguements are ringing thru.

I would never have classed myself as a euro sceptic but that is what I am I suppose.

hmmm

Monty Burnz wrote: »

I have been told in private by a national pol cor that the EU were adamant that none of the Irish banks could be let go. If that is true, then what I have said is 100% correct. If the EU said 'let it go bust if you please' and the Fianna Failures still begged for the bailout money, then you are 100% correct.

There's no need for your inside sources, it was clear at the time we signed the EU/IMF deal that not defaulting on Senior debt was a condition. We still did not have to sign the deal if we didn't want to, we could have cut social welfare and public sector salaries by a third overnight and allowed our banking system to collapse if we preferred.

hmmm

CDfm wrote: »

I would never have predicted that the germans would effectively control it.

You're obviously reading the wrong economists if you couldn't predict that the Germans and French would control the Eurozone.

hmmm

CDfm wrote: »

You seem to have a real problem apportioning even part of the blame elsewhere other than Ireland.

To make you happy. I'd say the Europeans were 10% at fault for this, Ireland 90%. Happy now?

You wont accept that it had structually faults that the mechanism did not correct. The previous mechanism did.

Of course it had flaws, this was all known at the time the Eurozone was conceived. I remember reading in the FT at the time a long series of articles setting out how the Eurozone would inevitably lead to a fiscal as well as a monetary union. Well, surprise!, that's what is happening.

What rules were in place enforceing these rules.

None, because it is run by Germans for German benefit.

The responsibility for regulating banks in each member country was left up to the country itself. Ireland resisted any attempt by the EU to interfere in our fabulous "light touch regulation" system which was giving us a competitive regulatory arbitrage advantage. We can't blame the EU for not regulating when we told them to butt out when they tried.

Effectively, the country could have enacted Chapter 11 style legislation but bailout was the only thing on the table it seems

Err yes that was it, we went begging for money and there were conditions attached. Do you think we should have been given money without conditions? You're like the begger who throws money back at someone because they expected more.

Just because you quote a number of economists in your appeals to authority doesn't mean you have much of an understanding.

K-9

Indeed, we voted for the Euro with Maastricht, it's pretty basic stuff.

Seems we can't discuss Iceland either, a country that had its own currency and interest rates, so it's kind of a pointless discussion.

Norway did fine but looking at our policies over the last decade I'd say we'd have ended up more like Iceland if we'd stayed out.

Tbh, this thread is a good argument for handing more powers to the ECB particularly regulation.

Germans have already taken a hit on a bank on our watch in the IFSC, so I suppose they are reluctant to take any more, particularly when we don't want to tighten regulation there.

Scofflaw

Monty Burnz wrote: »

I have been told in private by a national pol cor that the EU were adamant that none of the Irish banks could be let go. If that is true, then what I have said is 100% correct. If the EU said 'let it go bust if you please' and the Fianna Failures still begged for the bailout money, then you are 100% correct.

That's pretty much the wrong way round, though - what made us need the bailout was fundamentally the bank debt, the bank debt was fundamentally the result of the Guarantee, and the Guarantee was taken without consultation with the EU (or anyone, really). And Fianna Fáil seem to have done their best to avoid an IMF/EU bailout - not that their best was very good, but still, the opposite of begging for it.

cordially,
Scofflaw

CDfm

hmmm wrote: »

You're obviously reading the wrong economists if you couldn't predict that the Germans and French would control the Eurozone.

Ahem, how many countries are in the Euro & how many in the EU - all for one and one for all is the theory not all for one.

hmmm wrote: »

To make you happy. I'd say the Europeans were 10% at fault for this, Ireland 90%. Happy now?

Of course it had flaws, this was all known at the time the Eurozone was conceived. I remember reading in the FT at the time a long series of articles setting out how the Eurozone would inevitably lead to a fiscal as well as a monetary union. Well, surprise!, that's what is happening.

I disagree with you there because the mechanism has not produced stability and does not have the ore-requisites which the US has with which to do so.

Surprise surprise it is not in our interest.

Where is it written that the Euro can only operate to produce a surplus for Germany.

The responsibility for regulating banks in each member country was left up to the country itself. Ireland resisted any attempt by the EU to interfere in our fabulous "light touch regulation" system which was giving us a competitive regulatory arbitrage advantage. We can't blame the EU for not regulating when we told them to butt out when they tried.

The sovereign debt is not the same as bank debt.

Did Germany control its banks and stop them from lending to them.

No.

The mechanism did not work and there is a good argument that it was designed to work to revitalise the German post re-unification economy.

Err yes that was it, we went begging for money and there were conditions attached. Do you think we should have been given money without conditions? You're like the begger who throws money back at someone because they expected more.

It is not the same.

The terms are extortionate.

Just because you quote a number of economists in your appeals to authority doesn't mean you have much of an understanding.

Indeed, it is my qualification and I have worked at it professionally which is why I am incredulous at the outcome and pro euro arguments here.

K-9 wrote: »

Indeed, we voted for the Euro with Maastricht, it's pretty basic stuff.

Seems we can't discuss Iceland either, a country that had its own currency and interest rates, so it's kind of a pointless discussion

You can discuss Iceland but IMO it is like discussing a point to point vs Cheltenham.

Norway did fine but looking at our policies over the last decade I'd say we'd have ended up more like Iceland if we'd stayed out.

Tbh, this thread is a good argument for handing more powers to the ECB particularly regulation.

So you admit that there are flaws to the euro and its regulation.

Norway is rich in resourses and had the capital to develop itself. We do not have that base and never had.

Germans have already taken a hit on a bank on our watch in the IFSC, so I suppose they are reluctant to take any more, particularly when we don't want to tighten regulation there.

It is not our responsibility what private institutions do to each other.

K-9

Obviously there are flaws with the Euro, it isn't a matter of admitting them.

There are major flaws with having your own currency too and this is what Euro sceptics have great difficulty admitting, eg. your dismissal of Iceland.

It's funny how you don't see the IFSC as our responsibility, yet have no problem blaming Germany and France.

The question has to be asked, whose responsibility is it then if it isn't the Government that set it up and actively promotes it worldwide with tours by John Bruton.

hmmm

CDfm wrote: »

Ahem, how many countries are in the Euro & how many in the EU - all for one and one for all is the theory not all for one.

Ah come off it. You thought that Luxembourg would have the same weight as Germany in the Euro? You're either extremely naive or creating strawmen.

I disagree with you there because the mechanism has not produced stability and does not have the ore-requisites which the US has with which to do so.

That was known from the beginning. "Stability" was in our control if we had regulated our banking sector properly.

Where is it written that the Euro can only operate to produce a surplus for Germany.

What is that supposed to mean?

Indeed, it is my qualification and I have worked at it professionally

Sorry, I don't believe you.